Bookkeeping and accounting both are used in the context of recording of business transactions done by a company; however there are many differences between the two. Given below is the list of differences between the two-
1. While bookkeeping is concerned with the recording of transactions done by the company but accounting is concerned with not only recording of transactions but also presenting it to the other parties in the form of balance sheet and profit and loss account.
2. While bookkeeping does not require any special knowledge or degree whereas accounting does require professional degree in order to prepare accounts correctly.
3. While bookkeeping does not have any branches, while accounting has many branches like management accounting, financial accounting etc…
4. While bookkeeping is there for only recording transactions but on the basis of accounts the top management takes many important decisions like how to raise capital, how much debt is there in the books of accounts, how much profits company has made and whether the company’s profits has increased or decreased from past years.
Though there are many differences between the two they both are interdependent because without bookkeeping accounting will not be possible as bookkeeping provides the initial data for it to prepare statements like profit and loss and balance sheet.