Book-Keeping should not be confused with accounting.The process of accounting begins where the book keeping process ends.I will do point wise discussion Book-keeping Accounting 1. It is recording phase It is summarising phase 2. It is basis for accounting It is basis for business language 3. Persons responsible are called book-keepres Persons responsible are called accountants 4.It does not require any special skill It requires special skill and knowledge 5.Financial statements are not prepared from records can be prepared from accounting records 6.It can not give complete picture of the financials It will complete and clear picture of financials 7.It cannot help for decission making It will help for decission making
Book keeping is the art of recording the transaction in the books of original entry and the ledgers. This work is usually performed by junior clerks who are sometimes called book keepers or account keepers. This work is less of mechanical nature and does not require any specialized knowledge of the principles of accountancy. The work of such clerks is supervised by a man who is called an accountant.
Accountancy involves the preparation of the final accounts to show the results of the business at the end of a particular period. The man who is ensured with this work is called an accountant. His work is not only supervising the work of book keepers but also to analyze, review and draw conclusions from the final accounts. His work is of specialized nature and he must be well versed with the principles of accountancy.
Auditing is quite a different thing from book keeping and accountancy. Auditing has nothing to do with the writing of the books of accounts or preparation of the final accounts. Auditing is a careful and critical examination of the books of accounts to find out their accuracy, whether the profit and loss account and the balance sheet have been properly drawn up and whether they exhibit at true and correct view of the state of affairs of the business.
The difference between Book-keeping, Accountancy and Auditing are: Book-keeping is to keep track and record daily(manually by batching) or monthly activities of business related of all accounts to be up-to-date, accurate transactions to be made in manual papers of by computerized system. Accountancy is a wide range of coverage with knowledge of the book-keeping, Accounting, Financial Accounting, cost accounting and management accounting called accountancy. Auditing is a job or an action to check others company accounts to fulfill some regulations in company law as a Ltd co and Public co (usually auditors role is performed by accountant firms) to check others companies accounts.
Book keeping is a proper & systematic keeping of books of accounts.it starts form the identification of transaction.each transaction must be supported by evidences n these must be financial in nature.eg.selling goods for cash is aa accounting transaction,b'coz cash is received n goods are going outside the business, the transaction will increase cash n reduce goods.it will affect the finance of the buisness.there is also a documentary proof of the transaction b'cozcash memo must have been issued for sale.after identification the book keeper record the transaction in proper books of accounts Accounting on the other hand is an art of identifying ,classifying,recording,summarising and interpreting business transactions of financial nature.it is a wider concept than book keeping.book-keeping is a part of accountancy. Accounting is concerned with the initial records ,ledger accounts,trial balance and also with the prepration of financial statements to ascertain profit n loss of the business.the value of assets n liabilities are also reported .the results of the business are also integrated in terms of ratios n statements.book keeping is initial n integral part of accounting is restricted to initial records i.e.journal,subsidiary books,ledger n trial balance.both are complementary and supplementary to each other.accounting depends on book keeping.in book keeping ,accounting concepts n conventions are followed. But methods of reporting and interpretation may vary from firm to firm.
Book keeping is defined as the process through which all the financial transactions done by a company or individual and recorded. It is simply to keep record of everything that is sold, bought, owed, owned by a company and it also includes the money that comes in and the one that goes out. Whereas Accounting and Accountancy are the same thing. They refer to the process of measurement, statement and provision of assurance of financial information. This information is further used by institutions such as lenders, managers, investors etc. Bookkeeping is a part of accounting.
Before we proceed further, it is considered necessary that one should understand the difference between Book-keeping, Accountancy and Auditing:
Book-keeping is an art of recording the business transactions in the books of original entry and the ledgers.
On the other hand accountancy means the compilation of accounts in such a way that one is in a position to know the state of affairs of the business.
But auditing means the verification of book entries and accounts to find out their accuracy. It is neither book-keeping, nor accountancy.
The spade work is done by the book-keeper and the accountant while the finishing touch is given by the auditor or, as has been said, that where the work of an accountant ends, the work of an auditor begins.
Sometimes an auditor is asked to prepare from a set of books the trial balance, profit and loss account and balance sheet in which case he would be acting as an accountant and he would not be required to give his certificate at the foot of the balance sheet. He has simply to put his signature in token of his having prepared such a profit and loss account and balance sheet. On the other hand, an auditor has not to prepare the trial balance, profit and loss account and balance sheet. He is to report whether the profit and loss account and the balance sheet prepared by the accountant exhibit a true and fair view of the state of affairs of the concern and in the case of a company, they are drawn up according to the Companies Act.
A book-keeper and an accountant has to record the transactions in the books of accounts while an auditor has to check and verify such transactions and accounts and send a report to the persons who appointed him.
