Book-keeping and accounting are often used interchangeably but they are different from each other. Book-keeping is mainly concerned with recording of financial data relating to the business operations in a significant and orderly manner. It is the science and art of correctly recording in books of account all those business transactions that result in the transfer of money or money's worth. It is mechanical and repetitive. This work is usually entrusted to junior employees of accounts section of a business house.
Accounting is a broader and more analytical subject. It includes the design of accounting systems, which the book-keepers use, preparation of financial statements, audits, cost studies, income-tax work and analysis and interpretation of accounting information for internal and external end-users as an aid to making business decisions. This work requires more skill, experience and imagination. The larger the firm, the greater is the responsibility of the accountant. It can be said that accounting begins where book-keeping ends. Book-keeping provides the basis for accounting.
Accounting is a broader and more analytical subject. It includes the design of accounting systems, which the book-keepers use, preparation of financial statements, audits, cost studies, income-tax work and analysis and interpretation of accounting information for internal and external end-users as an aid to making business decisions. This work requires more skill, experience and imagination. The larger the firm, the greater is the responsibility of the accountant. It can be said that accounting begins where book-keeping ends. Book-keeping provides the basis for accounting.
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