Difference Between Accounting & Bookkeeping Degrees
Accounting and bookkeeping degrees provide students with fundamental tools and methodologies used in recording business activities, analyzing trends and preparing financial statements. A bookkeeping degree typically is a two-year college degree that allows a student to learn about accounting ledgers as well as account debits and credits. An accounting degree usually is a bachelor's degree that provides a student with financial analysis and reporting tools.
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What is Bookkeeping?
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Bookkeeping activities include recording corporate activities into ledgers and ensuring that debits and credits are correct. A ledger is an accounting record, and debits and credits are additions and subtractions, respectively, to corporate accounts such as revenues, expenses, assets and liabilities. A bookkeeper debits expense and asset accounts to increase them, and credits these accounts to reduce them. The opposite is true for revenue and liability accounts. For example, a bookkeeper may credit sales (a revenue account) to increase it because a customer receives goods shipped.
Bookkeeping Degree Features
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A bookkeeper degree typically is a two-year college degree that teaches a student fundamental tools needed to record corporate activities. Bookkeeping courses may include accounts payable, accounts receivable, accounting debits and credits, bank reconciliation and ledger preparation. A bookkeeping degree helps a student get an entry-level job in an accounting department. For example, a bookkeeper may learn how to perform a monthly bank reconciliation by taking bookkeeping courses at a local college.
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What is Accounting?
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Accounting is a business activity that helps a company record transactions, analyze operating data, perform financial evaluation and prepare a full set of financial statements that comply with generally accepted accounting principles (GAAP). In essence, accounting is the next level of bookkeeping. A full set of financial statements includes a balance sheet or statement of financial position, a statement of income or profit-and-loss statement, a statement of cash flows and a statement of retained earnings, also known as a statement of owners' capital.
Accounting Degree Features
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A degree in accounting typically requires four years of studies in topics such as financial accounting and reporting, auditing, investment valuation, economics and finance. An accounting degree allows a student to understand clearly how financial statements reflect operating transactions that bookkeepers record. An accounting degree also may help a student apply for a professional certification such as the certified public accountant (CPA) license or the certified internal auditor (CIA) designation.
Bookkeepers Versus Accountants
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An accountant performs a variety of tasks, such as financial reporting, operating data analysis and accounting consolidation, that a bookkeeper cannot perform. Simply put, an accountant may perform bookkeeping tasks, but the opposite is not true. A bookkeeper may not fully understand all mechanisms around financial reporting processes and how to apply GAAP to prepare a full set of financial statements.
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References
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