Question

Differentiate between book-keeping and accounting.

Answer 1

The differences between book-keeping and accounting are

$\begin{array}{ccc}\text{Basis}& \text{Book-keeping}& \text{Accounting}\\ \text{Scope}& \text{Book-keeping involves identifying financial transactions,}& \text{Accounting involves summarising the recorded}\\ & \text{measuring them in money terms, recording them in the}& \text{transactions, interpreting them and communicating the}\\ & \text{books of accounts and classifying them.}& \text{results.}\\ \text{Objective}& \text{Its objective is to maintain systematic records of}& \text{Its objective is to ascertain net results of operations and}\\ & \text{financial transactions.}& \text{financial position so as to communicate such}\\ & & \text{information to various interested parties.}\\ \text{Nature of Job}& \text{This job is routine in nature.}& \text{This job is analytical and dynamic in nature.}\\ \text{Performance}& \text{Junior staff performs this function.}& \text{Senior staff performs this function.}\\ \text{Relation}& \text{Book-keeping provides the basis for accounting.}& \text{Accounting begins where book-keeping ends.}\\ \text{Special Skills}& \text{Book-keeping does not require special skills.}& \text{Accounting requires special skills and ability to analyse}\\ & & \text{and interpret.}\end{array}$