Thursday, March 25, 2010

Bookkeeping and Accounting

There is some confusion over the distinction between “bookkeeping” and”accounting”.
This is due in part to the fact that the two are related and that there is no universally accepted line of demarcation between bookkeeping and accounting.
In general, bookkeeping is the recording of business data in a prescribed manner. A bookkeeper may be responsible for keeping all the records of a business or only a minor segment, such as a portion of the customers’ accounts in a department store. Much of the work of the bookkeeper is clerical in nature and in large organizations it is increasingly being accomplished through the use of mechanical and electronic equipment.
Accounting is primarily concerned with the design of the system of record, the preparations of reports based on the recorded data, and the interpretation of the reports. Accountants often direct and review the work of bookkeepers. The larger the firm, the greater is the number of gradations in responsibility and authoring. The work of accountants at the beginning levels may include some bookkeeping. In any event, the accountant must possess a much higher level of knowledge, conceptual understanding and analytical skill than is required of the bookkeeper.

1 comments:

Unknown said...

bookkeeping is very important for any organization..Bookkeeping represents a process of recording actual transactions of a business..and i think that accounting is a more complex concept that is..reflection of the results of transactions according to the principles..
bookkeeper

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