Question

Explain the relationship between bookkeeping and accounting in terms of accurate financial reporting and analysis

Answer 1

RELATIONSHIP BETWEEN BOOKKEEPING AND ACCOUNTING IN TERMS OF ACCURATE FINANCIAL REPORTING AND ANALYSIS..

Their is a huge relationship between bookkeeping and accounting.The main objective of bookkeeping is to keep the records of financial transaction systematic and proper.The main objective of accounting is given accurate financial situation and give proper information to the relevant authorities.

Financial statements are not prepared at the time of bookkeeping. In accounting process financial statements are prepared.

In Bookkeeping doesn't require any special skill.Accounting required special skill.

Bookkeep and accounting are both essential business function.Both bookkeeping and accountants work with financial data.

Bookkeeping is an indispensable sunset of accounting. Every business and not for profit entity needs a reliable bookkeeping system based on established accounting principles. Keep in mind that accounting is much broader term than bookkeeping.

Bookkeeping refers to mainly to the record keeping aspects of accounting. Its essentially the process of recording All the information regarding the transaction and financial activities of a business.

A firm can know how much profit it has earned or how much loss it has incurred in a particular period.This knowledge is naturally essential in order to know whether one is on the right path or not.otherwise one will merely grope in the dark.

Through accounts properly kept, losses of addetd will be apparent without Daly. This will help in minimising such losses.

A strict watch can be kept on the amounts owing to outsiders, so that the firm will know what amounts are to be paid .propeaccountingng not only prevents and discovers errors, it also prevents and discovers frauds.