Accountancy · Ch 1 — Introduction to Accounting
Book-Keeping, Accounting and Accountancy
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Book-Keeping, Accounting and Accountancy
These three words are used loosely in everyday speech but have precise, different meanings in the subject.
| Term | What it covers |
|---|---|
| Book-keeping | The mechanical, routine part only — identifying transactions, recording them in the Journal, and posting them to the Ledger. It ends at preparing the Trial Balance. It needs care and accuracy, not judgement. |
| Accounting | Book-keeping plus summarising (Final Accounts) and interpreting the results. It requires analytical skill and judgement — e.g. deciding how to value closing stock, or how much depreciation to charge. |
| Accountancy | The whole body of knowledge, theory and principles that governs how accounting is done — it is the subject, of which accounting is the practice and book-keeping is the process. |
Definition 1Book-keeping
The process of recording, in a systematic manner, the monetary transactions of a business in the appropriate books of accoun …
Definition 2Accounting
The process of identifying, recording, classifying, summarising, interpreting and communicating financial information about a …