Hi All,
Can any one tell me the difference between Accounts/Accounting and Finance?
Regards,
Rajeev
2 Replies
CA Tushar Lakhanpal
(CA)
(416 Points)
Replied 17 February 2010
well let me try.
accounting is recording business transactions (whatever happened in monetary terms)
whereas finance is only a small part of these accounting enteries .
finance is related to procurement of funds for a business for both short and long terms
JAGADEESH
(CA-FINAL ( FINANCE MANAGER))
(57 Points)
Replied 17 February 2010
Accounting
Accounting is nothing but ‘recording of transaction in a systematic manner’. It is mainly concerned with recording the business and any other transactions in a monetary form whether the cash is involved or not at the time of recording the business transaction. It may be cash or credit transaction. Transaction is recorded for the future reference in only accounting or monitory form.
Accounting includes following functions :
1. Day-to-day recording of transactions in Day-Book
2. Verification of the prime books like cash book Journals and Bank book
3. Preparing & presenting financial statements (P&L and B/S).
Finance :
Finance mainly involves generating funds to meet the various cash flow needs of an entity. Finance functions begins with collecting the cash flow information from the accounting records and also prepare projections of cash flow. Finance activities are concerned with preparing budgets and compare the same with the actual results for finding variances. Here the sources and application of funds are prepared for both the budgets and actual scenarios.
Finance includes,
1. Co ordination for Bank transactions
2. Sourcing and Application of required funds
3. Preparing Budgets
4. MIS and EIS reporting
Finance is a part of Account as it encompass through the Accounting and Operations aspects of an organization.
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