Finance is a field that deals with the allocation of assets and liabilities over time

under conditions of certainty and uncertainty. Finance also applies and uses the
theories of economics at some level. Finance can also be defined as the science of
money management. A key point in finance is the time value of money, which states
that purchasing power of one unit of currency can vary over time. Finance aims to
price assets based on their risk level and their expected rate of return. Finance can
be broken into three different sub-categories: public finance, corporate
finance and personal finance.

Key difference: Accounting is the process of creating and managing financial

statements which record the day to day transactions of the business. Finance has a
broader scope and is responsible for initiating transactions to aid in cash, investment
and other working capital management.

Accounting and finance are both forms of managing the money of the business, but
they are used for two very different purposes. One of the ways to distinguish between
the two is to realize that accounting is part of finance, and that finance has a much
broader scope than accounting.

Accounting is the practice of preparing accounting records, including measuring,

preparation, analyzing, and the interpretation of financial statements. These records
are used to develop and provide data measuring the performance of the firm,
assessing its financial position, and paying taxes. Finance, on the other hand, is the
efficient and productive management of assets and liabilities based on existing
information.

Finance is the study of money and capital markets which deals with many of the
topics covered in macro economics. It is the management and control of assets and
investments, which focuses on the decisions of individual, financial and other
institutions as they choose securities for their investments portfolios. Also,
managerial finance involves the actual management of the firm, as well as profiling
and managing project risks.
Another way to look at it is that, accounting analyzes the past expenses and
performance of the business. This information is then used by the finance department
to make decisions about the future.

Accounting Finance
Definition Preparation of accounting Efficient and productive
records management of assets and
liabilities based on existing
information
Purpose Measuring, preparation, Decision making regarding
analyzing, and working capital issues such
interpretation of financial as level of inventory, cash
statements. To collect and holding, credit levels,
present financial financial strategy,
information. managing and controlling
cash flow.
Goal To see how the company is To forecast the future
performing, to monitor day performance of the
to day accounting business.
operations, and for taxing.
Tools Balance sheets, profit and Performance reports, ratio
loss ledgers, positional analysis, risk analysis,
declarations, and cash flow estimating break evens,
statements. returns on investment, etc.
Determination of funds Revenue is acknowledged Revenues are
at the point of sale and not acknowledged during the
when it was collected. actual receipt in cash as in
Expenses are cash flow and the expenses
acknowledged when they are acknowledged when the
are incurred than when they actual payment is made as
are paid. in cash outflow.