DIFFERENCE BETWEEN ACCOUNTING AND ACCOUNTANCY

To understand the Difference Between Accounting and Accountancy, these both terms should be understood:

Accounting refers to the mechanism of maintaining and keeping the records of the transactions and events and also its analysis and interpretation. It also includes the preparation of final accounts i.e. Trading and Profit and Loss Account and Balance Sheet at the end of the financial year. It is associated with communicating the interpreted results of the financial information to its users.

ACCORDING TO AICPA (American Institute of Certified Public Accountants)

“Accounting is art of recording, classifying, summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character and interpreting the results thereof.”

Accounting is a system which involves the identification of transactions and events which are financial in nature; ensuring measurement of transactions in the monetary terms; recording the transactions in the journal; classifying the entries in ledger, summarizing the entries in final accounts i.e. Trading Account and Profit and Loss Account and Balance Sheet; analyzing and interpreting the results and communicating the results to the users of the accounting information.

Accountancy refers to systematic knowledge of accounting concerned with the principles and techniques which are applied in accounting. It tells us how to prepare the books of accounts, how to summarize the accounting information and how to communicate it to the interested users.

ACCORDING TO KOHLER

“Accountancy refers to the entire body of theory and practice of accounting.”

Accountancy is wider in scope than book-keeping and accounting. It is a body that consists of the guiding principles and rules of book-keeping and accounting.

BASIS OF DIFFERENCE	ACCOUNTING	ACCOUNTANCY
MEANING	It is concerned with recording, classifying and summarizing of transactions.	It is a body of knowledge prescribing certain rules or principles to be observed while recording, classifying and summarizing of transactions.
SCOPE	It is narrower in scope than accountancy but wider than book-keeping.	It is wider in scope than accounting. And book-keeping both.
RELATION	It depends on book-keeping.	It depends on both book-keeping and accounting.
FUNCTION	Its main function is to ascertain the net results and financial position of the business and to communicate them to interested parties.	It includes the decision making function also on the basis of information provided by book-keeping and accounting.
MAIN TOOLS	The main tools are Profit and Loss Account and Balance Sheet.	The main tools are Concepts, Conventions, Rules etc.

Also Study	Also Study	Also Study	Also Study
Accounting	Non profit organisation	Depreciation	Liquidity ratios
Nature of Accounting	Receipts and Payments Account	Depreciation Accounting	Acid Test Ratio
Benefits of Accounting	Scope of accounting	Hire Purchase Accounting	Cash Ratio
Difference between cost accounting and financial accounting	Financial accounting, cost accounting and management accounting	Difference between hire purchase and instalment system	Financial ratio analysis
Difference between transaction and event	Transactions	Users of Accounting	Ratio analysis
Limitation of Accounting	Capital Expenditure	Instalment System	Difference between consignment and sale
Book Keeping	Revenue Expenditure	Reserves Accounting	Abnormal loss vs normal loss in consignment
Accountancy	Difference between capital and revenue expenditure	Provisions	Treatment of loss on consignment
Accounting as science or an art	Accounting Equation	Single entry system	Accounting treatment of consignment
Book Keeping vs accounting	Deferred Revenue Expenditure	Difference between statement of affairs and balance sheet	Joint venture vs consignment
Book keeping vs accountancy	Capital receipt	IFRS	Departmental Accounting
Accounting vs accountancy	Revenue receipt	Balance Sheet	Methods of departmental accounting
Basis of Accounting	Difference between capital and revenue receipt	Profit and loss Account	Allocation of expenses in departmental accounting
Branches of accounting	Difference between accounting concepts and conventions	Trading Account	Inter-departmental transfers
Cash and mercantile system of accounting	Accounting Standards	Voyage Account	Different types of branches
Accounting Principles	Objectives of Accounting	Accounting for Incomplete Voyage	Departmental vs Branch accounting
Golden ru les of accounting	Process of Accounting	Joint venture	Methods of branch accounting
Double entry system of book keeping	Scope of Accounting	Joint Venture Vs Partnership	Incorporation of branch trial balance
Double entry vs Single entry system	Accounting Concepts vs Accounting conventions	Methods of recording transactions in Joint Venture	Garner VS Murray Rule
History of Accounting	Difference between provisions and reserves	Consignment