Financial and management Accounting - 4 Credits (Book ID:B1130)
Q1. Distinction between book-keeping and accountancy Ans:
Distinction between Book-keeping and Accountancy
Accountancy is the profession andthe practitioners of accountancy are called accountants. Book keeping is the basic activity of recording. On recording the transactions and events in the books of accounts, accounting doesthe role of analysis and reporting. Accountancy is the profession of carrying the activities of book keeping and accounting. Accounting enjoys wider scope and includes not only book keeping but also analysis, interpretation and reporting of financial information. The later part of accounting is the core function of accounting. In the present day environment, sophisticatedsoftware packages are available, which facilitate entry of transactions and preparation of ledgeraccounts.
It is a process of identifying, measuring,recording and analyzingthe transactions inbooks of accounts
It involves summarizing the classifiedtransaction, interpreting the analyzed resultsand communicating the information to theusers of financial statement.
Adopt principles of accounting forrecording
Analyzing and interpreting requires skill,knowledge and experience
Book keeping is thefirst stage of accountingprocess
Accountancy follows book keeping. It is thesecondary stage
The objective is toprepare final accountsand balance sheet in asystematic manner atthe end of accountingperiod
The objective is to ascertain net results of financial operations and communicate theresults to all stakeholders in a manner theyunderstand.
Accounts executiveswho perform thisfunction may notrequire higher level of knowledge.
Accountants who perform this function needhigher analytical skills to interpret the dataand to take appropriate decisions.
The nature of job isroutine and clerical
The nature of job is non routine but analytical.