Book Keeping

Book Keeping - The Basis of Accounting 

Book keeping is the record-making phase of accounting which is concerned with the recording of financial transaction and events relating to business in a significant and orderly manner. 

Book keeping should not be confused with accounting. Book keeping is the recording phase while accounting is concemed with the summarizing phase of an accounting system. The distinction between the two are as under 

Book keeping	Accounting
1. It is the recording phase of an accounting system	1. It is the summarising face of an accounting system
2. It is a primary stage and basis of accounting.	2. It is a secondary stage which begins where the bookkeeping process ends.
3. It is written in nature and does not require any special skills or knowledge.	3. It is an analytical in nature and required special skills or knowledge.
4. It is done by junior staff called bookkeepers	4. It is done by senior staff called accountants.

5. it does not give the complete picture of the financial conditions of the business unit. / 5. it gives the complete picture of the financial conditions of the business unit.

Types Of Accounting Information

Accounting information can be categorized into following: 

1. Information relating to profit or loss i.e. income statement. It shows the net result of business operations of a firm during a particular accounting period.

 2. Information relating to financial position i.e. balance sheet. It shows Assets on one side and capital and liability on the other side.

3. Schedules and notes forming part of balance sheet and income statement to give details of various items shown in both of them.