ACCOUNTANCY

                                       WHAT IS ACCOUNTANCY? 🤔

MEANING OF ACCOUNTANCY:

Bookkeeping is a part of accounting.

This is the first phase of accounting. 

It is the procedure for entering transactions into the accounting records. Accountancy includes accounting. The process of recording, classifying, and reporting on commercial transactions for an organization is known as accountancy. The fundamental standards and presumptions that form the foundation of the accounting system are known as accounting principles.

THE DIFFERENCE BETWEEN ACCOUNTING AND ACCOUNTANCY CAN BE EPLAINED AS:

The recording and reporting of financial transactions is the focus of accounting. 

On the other hand, the term "accountancy" is broader and includes systems design for transaction recording, establishing control, financial statement preparation, and legal compliance.

DEFINITION OF ACCOUNTANCY:

1) “Accountancy refers to the entire body of the theory and process of accounting.” By Kohler. 

2) Prof. Robert N. Anthony has defined accounting as “Nearly every business enterprise has an accounting system. It is a means of collecting, summarizing, analyzing and reporting in monetary terms information about the business transactions.” 

NOW THAT WE HAVE UDERSTOOD WHAT IS BOOKKEEPING AND ACCOUNTANCY, LET'S NOTE THE POINTS OF DIFFERENCE BETWEEN THEM:

Point	Bookkeeping	Accountancy
Meaning	Recording and classifying business transactions	Recording, classifying, summarizing, analyzing and interpreting the financial data
Stage	Primary stage, Base	Primary stage and Secondary stage of analysis and implementation
Objectives	Keep records in systematic manner	Preparation of financial statements and communication to authorities.
Responsibility	Junior staff	Senior staff
Outcomes	Results in Journal and Ledger (Shall be discussed in next topic)	Results in Profit and Loss A/c and Balance sheet.
Period	Day to day	Entire Year
Analysis	Does not require any analysis	Uses Bookkeeping information to analyze and interpret the data and then compiles it into reports.
Decision making	Cannot take decision based on this data	Based on this data can take critical decisions.
Skill required	No analytical required	Requires analytical skills.