Difference Between Accounting And Finance
The main dissimilarities or difference between accounting and finance can be pointed out as follows:
1. Definition
Accounting: Act of identifying, classifying, summarizing, systematic recording the business transactions and reporting the financial information
Finance: Art of distributing, managing and controlling assets, funds and other resources in a scientific manner
2. Related To
Accounting: It is related with the daily business transactions of financial nature
Finance: It is related with the proper utilization of funds and assets of the business
3. Objective
Accounting: To reveal net results (profit or loss) and financial position of the business
Finance: To make strategy regarding inventory, working capital and proper use of resources.
4. Users
Accounting: Management, employees, investors, regulators etc. are the main users of accounting information
Finance: Top level management and investors (shareholders) are the users of financial management
5. Concerned With
Accounting: It is concerned with the recording of monetary transactions
Finance: It is concerned with the distribution of funds
6. Methods Or Tools Used
Accounting: Journal, ledger, trading account, profit and loss account, balance sheet, income statement etc.
Finance: Ratio analysis, capital budgeting, risk analysis etc
Also Read:
Also Read:
7. Part Or Subset
Accounting: It is a part or subset of finance
Finance: It is not a portion of accounting
8. Deal
Accounting: It deals with historical financial data and information
Finance: It focuses on future financial planning
Accounting Vs Finance (Comparison Chart)
I hope this post is helpful to understand the difference between accounting and finance and to make comparison between them.
Accounting Vs Finance (Comparison Chart)
Basis For Difference
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Accounting
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Finance
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Introduction
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Process of collecting, summarizing and recording financial transaction of the business
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Distributing, managing and controlling funds and business resources
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Related To
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Financial transactions
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Utilization of resources and funds
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Purpose/Objective
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To disclose the profit or loss of the company
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To make plans and strategies
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Users
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Management, investors, employees etc.
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Management and stakeholders
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Concerned With
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Recording of business transactions
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Funds distribution
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Tools
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Journal, ledger, trading account, balance sheet etc.
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Ratio analysis, risk analysis, capital budgeting etc.
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Part Or Not
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Part of finance
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Not a part of accounting
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Deals With
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Historical data
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Future planning
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I hope this post is helpful to understand the difference between accounting and finance and to make comparison between them.
