DIFFERENCE BETWEEN BOOK KEEPING AND ACCOUNTING

To understand the Difference between Book keeping and Accounting, firstly we understand the both terms:

Book-Keeping is an art and science of recording business transactions in a systematic and chronological order. It is a combination of two words: Book + Keeping. It means to keep the books of accounts to record all the financial transactions. It is concerned with identification of transactions and events, expressing them in the monetary form and then recording the transactions in the books of accounts to make it available for future reference also.

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.

The Difference between Book keeping and Accounting is as follows:

BASIS OF DIFFERENCE	BOOK-KEEPING	ACCOUNTING
STAGE	It is the basis of accounting. It is primary stage.	It starts where book-keeping ends. It is secondary stage.
SCOPE	It is narrower in scope.	It is wider in scope.
OBJECTIVE	The main objective of book-keeping is to maintain the records of financial transactions.	The main objective of accounting is to ascertain the net results and financial position of the business and to communicate them to interested parties.
NATURE OF JOB	The book-keeping function is routine and clerical in nature.	Accounting function is analytical in nature.
WHO PERFORMS	Book-keeping function is performed by junior staff.	Accounting function is performed by senior staff.
KNOWLEDGE LEVEL	It can be performed by the persons having limited level of knowledge.	It is performed by the persons having higher level of knowledge as compared to book-keeper
ANALYTICAL SKILL	The book-keeper is not required to possess analytical skills.	The accountant is required to possess analytical skills.
PROCESS	The process involves: Identification of transactions, Measurement in terms of money, Recording in Journal, Classifying in ledger, Balancing of ledger accounts, Preparation of Trial Balance.	The process involves: Identification of transactions, Measurement in terms of money, Recording in Journal, Classifying in ledger, Summarising, Analysing, Interpreting, Communicating
ADJUSTMENTS AND RECTIFICATIONS	No adjustments are required.	Adjustments, transfers and allocations are done as per the policy framework in final accounts.

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