Difference between Accounting and Accountancy

Difference between Accounting and Accountancy

Accounting and Accountancy are two interrelated terms. Accountancy is a wider term and accounting comes under the perspective of accountancy. Accounting means recording, summarising, analysing and reporting financial transactions. It is concerned with keeping and maintaining books of accounts of the business. Accountancy on the other hand refers to the interpretation of financial data collected through accounting and communicating it in the form of financial statements to all concerned parties. Accountancy contains all rules, regulations, principles, conventions to be followed in the process of accounting. It clearly defines the duties and roles of an accountant who is required to prepare, check and interpret financial accounts. Accounting aims to record each and every financial activity taking place in business whereas accountancy aims to communicate all information regarding the financial state of business to all the concerned parties.

Difference between Accounting and Accountancy

Basis of DistinctionAccountingAccountancy
1. MeaningAccounting is a process of recording financial transactions for preparing and maintaining financial accounts.Accountancy refers to interpretation of financial accounting and communicating the financial information to all concerned parties.
2. ScopeNarrow.Wider and includes accounting under its perspective.
3. DependencyDoes not depend upon accountancy.Accountancy depends upon accounting for taking and communicating various financial information.
4. ObjectiveMaintaining fair record of each and every financial activity taking place in business.Providing details about financial state of business to all its stakeholders.
5. Decision makingDoes not help in decision making. Data recorded here need analysis to be done to derive useful information.Helps in decision making of management by presenting report regarding financial state of business.
6. ExampleRecording of purchase and sale of books comes under the accounting.When accountant interpret financial accounts and communicate financial information, it comes under accountancy.