Accounting Acer Series 1
If you open the conversation below, you will see that the teacher, Sarah, is half dead because of her "Blur Blur like Sotong" student
So, what do you think is the difference between bookkeeping and accounting?
Most people struggle to distinguish between bookkeeping and accounting when they try to define the two processes differences. Despite having similar objectives, bookkeepers and accountant assist your company at various points in the financial cycle.
Simply put, bookkeeping is more transactional and administrative, concerned with recording financial transactions. Accounting is more subjective, giving you insights into the business’s financial health based on bookkeeping information.
The function of bookkeeping
Bookkeeping is the process of recording daily transactions in a consistent way and is a key component to gathering the financial information needed to run a successful business.
Bookkeeping is comprised of:
Recording financial transactions
Posting debits and credits
Producing invoices
Preparation of financial statements (balance sheet, cash flow statement, and income statement)
Maintaining and balance subsidiaries, general ledgers, and historical accounts
Completing payroll
Maintaining a general ledger, which is a document that records the amounts from sales and expense receipts, is one of a bookkeeper’s essential responsibilities. The mor sales that are completed, the more the ledger is posted. A ledger can be created with specialized software or spreadsheet.
The function of accounting
A bookkeeper records financial information, which an accountant analyses and uses to give business owners crucial financial and business insights. The are some common accounting tasks:
Verifying and analyzing data,
Generating reports, performing audits, and preparing financial reporting records like tax returns, income statement and balance sheets,
Provide information for forecasts, business trend and opportunities for growth,
Helping the business owner understand the impact of financial decisions,
Adjusting entries
Analyzing financial reports to assist in corporate decision-making is a key step in the accounting process. As a result, you have a better understanding of your company’s true profitability and cash flow. Accounting transforms data from the general ledger into insights that show the business’s overall picture and direction it is headed. Accountants are constantly sought out by business owners for assistance with strategic tax planning, financial analysis, forecasting, and tax preparation.
Summary
There are contrasts between the two, even though they both deal with financial transactions and numbers. The distinction between bookkeeping and accounting may occasionally become unclear. Many companies use a bookkeeping who typically does more than update the books and record payments. Similar to this, accountants occasionally oversee the accounts and analyze the information and data by the client.
If you are not familiar with either bookkeeping or accounting, you may assume that they are the same thing. Bookkeeping is focused on recording information and ensuring the books are up to date, while accounting offers deeper interpretation and analysis of financial information. The work undertaken by bookkeepers lays the foundation for accountants, enabling them to prepare reports, file tax return and offer insightful, tailor financial advice.
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