What is the Difference between Bookkeeping Economics Accounting and Finance
In every type of business, we usually heard these terms like Bookkeeping Economics Accounting and Finance. Due to their frequent and interchangeably use, it seems that there is no any wide difference between these commonly using terminologies. However, it is not. There are vast differences that are as following.
Bookkeeping
Keeping record of financial transactions is called bookkeeping. A bookkeeper is the person, who keep these records like purchase, sale, payment and income either belong to organization or even of an individual one.
Economics
The analysis of production, consumption and distribution of products as well as services is known as economics that is a field of social sciences. Economics covers almost every field of life like education, crime, health, family, religion, law, war and politics.
Accounting
According to AICPA (American Institute of Certified Public Accountants), accounting is the way of keep records, classify them and then summarize them as well in an efficient manner, in the form of wealth as well as transactions.
Finance
Getting knowledge about funds management is called finance. The term can be categorized as personal finance, business finance and public finance as well. In broader way, we can see the meaning of finance as lending or saving money. all financial matters are based upon three facts called money, time and risk as well as relationship between them.
Bookkeeping vs Economics vs Accounting vs Finance
Basically the process of bookkeeping consists the recording of the incoming transactions and the recording of the outgoing transactions. Accounting is also the systematic recording of business transactions but it includes additional reports and further financial analysis of the transactions. This basically means that bookkeeping is the part of the accounting process. Economics is a social / behavioral science that deals with the scarcity of resources, and society's means of distributing those resources. While the field of finance deals with the concepts of time, money, risk and how they are interrelated.
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