What is Accounting & Book-Keeping?

Accounting and Book-keeping are two functions which are extremely important for every business organization. Often there can be a confusion between the difference between Accounting and Book-keeping, this is because both of them deal with financial data, require accounting knowledge and classify and generate reports using financial transactions. In the simplest of terms, bookkeeping is responsible for the recording of financial transactions whereas accounting is responsible for interpreting, classifying, analyzing, reporting, and summarizing the financial data. Regardless of the size of a business, accounting is a necessary function for decision making, cost planning, and measurement of economic performance measurement.