What is Bookkeeping?

It refers to the process of maintaining the financial transaction of a company by recording, storing and retrieving data on a regular basis. The transaction may be related to sales, purchase etc

The person who maintains the book is called the bookkeeper. It is important to keep all financial data in a systematic manner that is why bookkeeping plays an important role. Bookkeeping is done by all Financial systems whether it's government, private financial institutions or investors.

Bookkeeping is generally of two types-

• Single Entry System
• Double Entry System

Bookkeeping generally involves

• Maintaining and processing payroll system
• Preparation of financial system
• Invoice Processing
• Maintaining Accounts payable and receivables
• Preparation of general ledger accounts and maintaining them.

What is an Accounting?

Accounting is a process in which records maintained by bookkeeping are verified and converted into a financial report. It involves recording, analyzing, interpreting and summarizing the financial data of a company. A company’s financial position can be assessed by investors and stakeholders by the process of Accounting.

Accounting has different branches like

• Cost Accounting
• Management Accounting
• Financial Accounting etc

Accounting Process involves

• To record and adjust entries
• Preparation of ledger and trial balance
• To assess the cost of operation
• Filing Tax returns
• Analyzing effects of certain decisions.

Bookkeeping Vs Accounting