Difference between book keeping and Accounting

After studying the meaning of book keeping and Accounting the following point of difference emerge:-

(1) Stage : Book keeping is the basis of Accounting. Accountings is the culmination of bookkeeping. It starts where book keeping ends.

(2)  Scope :  Book keeping confined itself to recording posting, balancing and preparation of trial balance. Accounting is extends to preparation of final accounts after incorporating year end adjustment.

(3)  Skill  :  Bookkeeping is done by junior staff because the nature of work is clerical. Accounting is done by senior staff, because nature of job requires imagination, skill and analytical ability.

(4)  Operations :  Bookkeeping records transaction in significant and orderly manner.  Accounting classifies, summarises and provides information.

(5)  Activities  : Bookkeeping covers journalising, posting and extracting of balance.  Accounting covers preparation of final accounts and balance sheet.

(6)  Adjustment and rectification : In Book-keeping no adjustment and rectification is required. In Accounting, adjustments, transfers, allocation as per policy framework are incorporated in the final accounts.

(7) Nature : In Bookkeeping duties are preliminary in nature.  In Accounting, primary data is co-related, analysed and converted into secondary information.

(8)  Step : In Book-keeping, it is the first step before accounting commences. In accounting, it follows after Book-keeping procedures are completed.