Accounts

that Accounting starts where Book-Keeping ends. The function of Book-Keeping ends with the recording 4 transactions in the books of account. But the function of Accounting is to classify the recorded transaction summarise them, interpret them and collect and communicate necessary information to the management afl other interested persons. Management performs its function on the basis of this information, e.g. lay» down rules and regulations, taking so many vital decisions etc. Thus we may say that the function of Bool Keeping is primarily of clerical nature, while that of Accounting is concerned with organisational ad administrative matters (it is more important and responsible.
Apparently, the functions of Book-Keeping seem to be less important than Accounting, bi. : necessity can hardly be denied. Just an article cannot be produced without raw material, similvf accounting function cannot be done without obtaining necessary data from Book Keeping. Again, if i: any defect in raw material the article produced out of it will also be defective. Similarly, if there be m error or mistake in Book-Keeping, the accounting job will also be wrong and create anomalous situauoa Thus we can conclude that 'Book-Keepers perform the routine, repetitive tasks of collecting and proi financial information. Accountants are responsible for designing the systems within which Book-Keepol work; supervising the day-to-day work of book-keepers; recording unusual and complex trama, preparing, analysing and interpreting accounting reports; auditing the records; and performing a'van other complex accounting activities.
ACCOUNTING VERSUS ACCOUNTANCY
The two words "Accounting" and "Accountancy" are often used to mean the same thing. But it 1 not correct. Accountancy is the main subject(Accounting is one of its branches. The word "Accountan. far extensive; i.e. the scope of accountancy is far wide and extensive compared to Accounting. It covers m entire body of theory and practice, e.g. Book-keeping, Accounting, costing, auditing, Taxation etc.
BRANCHES OF ACCOUNTING
In order to meet the ever increasing demands made on accounting by different interested paroJ (such as owners, management, creditors, taxation authorities etc.) the various branches of accounting km come into existence:
1. FINANCIAL ACCOUNTING:
The main purpose of financial accounting is to ascertain the true result (profit or loss) o: :~t business operations during a particular period of time and to state the financial position of the business orJ particular point of time. Financial accounting produces general purpose reports for use by the great vanJ of people who are interested in the organisation but who are not actively engaged in its day-tcnM operation.
2. COST ACCOUNTING:
The main object of cost accounting is to determine the cost of goods manufactured or prod i the business. It also helps the management of the business in controlling the costs by indicating avoidM losses and wastes.
3. MANAGERIAL ACCOUNTING:
The object of this accounting is to communicate the relevant information periodically management of the business to enable it to take suitable decisions,
It should be remembered that in this book, we are concerned only with financial account** Financial accounting is the oldest and the other branches have developed from it. The objects of fmancfl iccounting can only be achieved by recording business transactions in a systematic manner according tol set of principles.