Financial accounting informs the outsiders, like bank, vendors and stakeholders, about the financial activity of company. Now a day, Accounting is called language of business, as it provides required information to many people, for instance, Management accounting is the branch, which keep the mangers of the company informed. Moreover, they analyze the cost of company’s products or services. The accounting departments also do preparation of company’s budgets and plan loan proposals. Accountants are also responsible for making monthly fiscal statements and yearly tax returns. Making statements regarding assets and liabilities also come under the jurisdiction of accounting. As the name suggest, in single entry a transaction is either recorded in debit or in credit column of the same account, but in case of double entry, two entries of each transaction are carried to ledger, one in debit column and other under credit heading.Īccounting deals with organized recording, reporting and analysis of financial activity of a company. Single entry and double entry are two types of bookkeeping. A bookkeeper enters a particular financial activity in its respective book and post to the ledger as well. Commonly used books are, daybook, ledger, cashbook and business checkbook, many others are also used, according to the nature of business. This activity is very important for the financial health of a company, as it informs the management about up to date financial condition of their company. Usually, bookkeepers are appointed to keep the record in accurate and precise manner.
Difference between bookkeeping and accounting software#
Traditionally, it is called as bookkeeping since records were kept in books now there are specific software for this purpose, but the old name is still in use. In simple words, recording the financial dealings of a company or individual is bookkeeping, like sales, purchase, revenues and expenditures. Both are very important for the proper management and financial success of a business. Bookkeeping is the initial stage, in which we keep the record of income and expenditure, whereas in Accounting department accountants analyze the company’s financial activity and prepare reports.
Bookkeeping and accounting are two different departments dealing with the accounts of company.
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