10 similarities and differences of bookkeeping and accounting

To anybody, bookkeeping might be seen as accounting. But the truth is, there are lots of differences between the two terms. However, those persons might be right because to some extent bookkeeping is part of accounting just as it is a part of what every manager must do. Below we dive into the similarities and differences of bookkeeping and accounting. 

Five similarities between bookkeeping and accounting

Record keeping

One similarity between bookkeeping and accounting is record keeping. For either to be successful, keeping records or documentation for future use cannot be swept under the carpet.

Terms used

Bookkeeping and accounting are based on monetary terms. More so, they might be based on qualitative and quantitative terms. Yes, when any of these functions are carried out parts of them are in qualitative and quantitative terms. For example, if a credit sales transaction is done, the bookkeeper will include the names of the individuals, location, and so on. And they are not in money terms.

Digitalization

With the increase in the advancement of technology including computers, the need for digitalization has no boundary. The two terms under discussion are now digitized. Various software is now available to handle various accounting and bookkeeping tasks.

Language

They are part of business terms or language. This is another reason why they cannot be separated. The only difference is that the business jargon of accounting is broader than bookkeeping.

Discipline

Both terms are finance disciplines such as economics and human resource management. They are usually studied together in higher institutions.

Five Differences between bookkeeping and accounting

Definition

Bookkeeping is defined as an art that involves collecting and recording transactions. However, accounting is seen as a process that begins with collecting data from financial transactions to presenting and analyzing them for users of accounting information.

Scope

The scope of bookkeeping is narrow compared to accounting. It is often said that bookkeeping is to accounting just as phonetic studies is to English studies. It is just the tip of the iceberg. 

Job title

Bookkeeper is the main title for the former. While accountant or finance expert/professional is mostly used for the latter.

Example

A bookkeeping example is the recording of transactions in source documents and posting them into the ledger books. For accounting, the preparation of financial reports is a good example. 

Tools used

ledger and subsidiary books are tools used in the former and trial balance and bank statements are examples of tools used in accounting.