Accountant is of the Business, Bookkeeping is for the Business
Posted by: Dr. Devaansh | Posted on: February 22nd, 2016
To differentiate between bookkeeping and accounting is like figuring out who said, Vladimir Putin or Tywin Lannister, “It is extremely dangerous to encourage people to see themselves as [inherently] exceptional, whatever the motivation”. It’s difficult to deduce.
An Accountant is someone who is responsible for the financial records of a business or person. He is expected to be skilled in the practice of accounting and in charge of public or private accounts, and what comes along with this responsibility is:
- Altering the classification or recordation of transactions to meet certain accounting standards
- Compiling tax returns from the financial information
- Creating a budget and comparing it to actual results
- Creating a set of controls within which the financial system operates
- Creating the chart of accounts
- Designing a record keeping, archiving, and document destruction system
- Designing the financial statements
- Issuing customized management reports to address specific issues
- Setting up the general ledger
Now, the recordation of these basic account transactions like listed below is bookkeeping:
- Recording cash receipts from customers
- Recording invoices from suppliers
- Recording changes in inventory
- Paying suppliers
- Processing payroll
- Processing petty cash transactions
- Issuing invoices to customer
The core issue between both of them is Accountant is of the business, bookkeeping is for the business or person, and we thought prepositions were trivial. In short, the difference between accounting and bookkeeping is that bookkeeping focuses on repetitive business transactions, and so is a subclass of the much superior set of tasks that can be incorporated by accounting.
Bookkeeping is an important part of the accounting information system because it serves as the groundwork for accounting. Bookkeeping is a branch of accounting which is responsible in recording the financial transactions of the business. It is the starting point of the whole accounting process. The person responsible on the bookkeeping process is often referred to as bookkeeper or accounting clerk. They are the one who ensures the recording of business transactions in the book of accounts, such as journals and ledgers, in chronological manner.
Bookkeeping deals with process of recording, in sequential order the daily transaction of a business organization. Bookkeepers are the army safeguarding the accuracy of book of accounts. Since it’s an integral part of accounting, they assist accountants in preparing reports, like financial statements or tax returns by providing summary and supporting documents of the recorded business transactions. However; it is only limited to the recording process and max to report preparation. Accounting is an entire information system- so it includes everything from recording to interpreting the financial condition and performance of the organization.