Bookkeeping is the practice of recording the transaction of a business. Accounting is the bookkeeping methodology involved in creating a financial record of business transactions and in preparing statements concerning the assets, liabilities, and operating results of a business. Accounting requires the recording and summarizing of business and financial transactions. The information then needs to be analyzed and verified and the results reported through financial statements.
Accounting is a 2-step process:
Step 1: Choose the right accounts used in a transaction.
Step 2: Determine the correct amount to be used in the transactions.
Both of these steps are critical to successful recordkeeping.
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