How does Bookkeeping differ from Accounting?
Manage episode 326555356 series 3342280
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Bookkeeping in a business firm is an important, but preliminary, function to the actual accounting function.
A bookkeeper collects the documentation for each financial transaction, records the transactions in the accounting journal, classifies each transaction as one or more debits and one or more credits, and organizes the transactions according to the firm's chart of account.
The financial transactions are all recorded, but they have to be summarized at the end of specific time periods. Some firms require quarterly reports. Other smaller firms may require reports only at the end of the year in preparation for doing taxes.
At the end of the appropriate time period, the accountant takes over and analyzes, reviews, interprets and reports financial information for the business firm.
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