Difference Between Accounting And Bookkeeping

The terms accounting and bookkeeping may seem to be mean identical actions, but the two are quite different from each other. Though accounting and bookkeeping have a few points in common, the distinguishing factors between the two form the major striking feature. In basic terms, accounting is a major task followed by bookkeeping which forms a small part of accounting. However, bookkeeping is also necessary as without that, accounting cannot take place.
In case of bookkeeping, the main task is to note down daily expenses and sales, in other words, transactions, in the form of a record based on time. A necessary part of bookkeeping is to obtain the proof and reason of every transaction occurred, and then keep them safely and separately. This basically includes collecting and stashing up receipts of expenditures. After a particular month of business is completed, the transaction records are transferred to a main file and further classified into several other accounts with headings like bills, payrolls, ingredients, etc.
Another major task of bookkeeping also includes balancing the accounts. This includes management of two types of accounts, for crediting and debiting. The bookkeeper is required to make a double entry for every transaction occurred. So in case of expenses, one has to note down the debits first and then also note down the credits. If you are buying something like supplies, you note down the debits and then also the credits, so that the suppliers account is credited respectively with the required amount of transaction. This helps in balancing the transactions.
So what exactly do we mean by accounting? Accounting is a type of practice and a knowledge body concerned with recording of transactions, performance of audits, storing financial records, reporting financial information to the management after thorough analysis of the data and also giving counsel or advice on matters of taxation. One of the most essential functions of accounting is that it reveals losses and profits, the type and value of assets of an organisation and the equity of the owner for a given time span.
When defined, accounting is a systematic method of identification, record making, measurement, classification, verification, summarisation, interpretation and communication of monetary information, and the availability of monetary resources in a given organisation.
What are the other distinguishing features of accounting and bookkeeping?
In case of accounting, a professional employer is needed, one who is an expert in several types of accounting like taxation, managerial accounting, auditing, financial accounting and many more. In case of the task of bookkeeping, the employer is merely required to be an administrative individual, and not necessarily any member of specialised accounting bodies and organisations.
It is however advisable that, in case anyone requires an experienced accountant or an individual for bookkeeping tasks in Malaysia, then one should contact reputed accounting firms which are associated with specialised chartered accounting bodies.