Lots of people who do not understand and assume that accounting is the same as bookkeeping. But actually, it is different. Even so, the two are interconnected with each other where the beginning of accounting activities is started from bookkeeping. Not only that, but accounting and bookkeeping also have the same source of financial information data within the company. Although different, accounting and bookkeeping have a close relationship and are an inseparable part. Bookkeeping will act as the basis of the accounting process and if the bookkeeping process is carried out in the right way then the accounting process undertaken will be perfect.
Differences in accounting and financial accounting
What exactly distinguishes accounting from financial accounting? Differences in accounting and bookkeeping can be easily understood by knowing the understanding of each. Bookkeeping is a complete systematic process of painting of monetary transactions in an organization. Bookkeeping is an activity to maintain each entity’s financial transactions to form a basic reference in the accounting process. The purpose of bookkeeping is to provide a clear picture of income and expenses at the end of the accounting period. Bookkeeping is usually done by the bookkeeper. The bookkeeper has the duty and responsibility to record every business transaction whether it is cash, goods, sell and buy transactions, and then record it in the ledger and then prepare it in the trial balance. To find out more, the following are the activities carried out by financial bookkeeping:
• Issue invoices to customers.
• Record invoices from suppliers.
• Record changes in inventory.
• Record cash receipts from customers.
• Paying suppliers.
• Process petty cash transactions.
• Processing salary/payroll.
Meanwhile, accounting is a business language that provides information about financial status in a company starting from recording transactions and making financial reports at the end of the period. In accounting, monetary transactions of a company will be systematically recorded and grouped depending on the type of transaction and then summarized and displayed to the company in an adjusted form. Following are the activities carried out by accountants:
• Make a list of accounts.
• Preparing Ledgers.
• Design financial statements.
• Publish management reports that are tailored to specific issues.
• Make a budget and compare it with actual results.
• Making tax reports.