Accounting vs Finance Importance For Professionals and Students
Most of the people think a subject like accounting and finance are the same thing. Whatever, there have several key differences between accounting and finance and that’s why the prospective students are confused to choose their future plan for professionalism career path.
Finance vs. accounting definition:
Accounting is the process of prior work of finance and its recorded daily basis transactions of the business in journal, recording in a classified ledger, transferred trail balance and then preparing the balance sheet.
Finance is an expanded rather than accounting which is responsible for the aid of cash and investing and operating capital. Now, what is the difference between accounting and finance is elaborately discuss though students career path.
Why study accounting and finance:
Students of accounting mentally prepared for entering or chose as a career path public accounting, private accounting or government accounting. In a small business to large corporation dealings with finance and taxes requires a skilled accountant.
In public accounting students, they are well trained in auditing, Taxation, Consulting services, financial support and business valuation.
In private accounting students can choose general accounts, internal auditing, cost accounting, taxation in business and much more.
The government wants too many of accountant for his local and federal works such as federal bureau of investigation, revenue services, general accountant and many others.
On the other hand, students of finance department develop their career as financial planner, public or corporate finance.
In financial planner, you may help the peoples to advice to make a decision such as to paying education, financing home, personal insurance, and inverting and saving for the students might find the career of banking or real estate, insurance or certified financial planner (CFP).
In corporate finance will key to managing companies sources of money and use it maximum and protect the financial risk. The student of finance disciplines works force can build their career in large and small business or non-profit organizations etc.
Similarly, public finance is related to public entities such as government agency.
Difference between accounting and finance in business:
Finance and accounting are two important elements of financial books. Most probably accounting is focused on past. On the other hand, finance focused on future.
Accounting is the provider of financial information. It involves the transaction of daily business recording, classifying, and balancing the transactions. Similarly, a financial statement is regarding the financial health of firms. Accounting is ensuring accurate recording and finance is reflects financial health of firms.
Finance states money and capital markets which are dealing with many topics of microeconomics which is focused on personal decision and financial institute and other institute investment portfolio along with risk management.
Another view of point, the accounting analysis is the past expenses and depends on the performance of the business. This information is used by the finance department for future forecasting.
Accounting vs. Finance difference:
Now we can discuss the key difference between accounting and finance is given below;
|Meaning||Preparing the accounting records||Finance is related to the financial transaction and its effects financial activities and implementation in management.|
|Main Purpose||Transactions made journalize, ledger, trial balance and finally financial statement to measure financial position.||Level of inventory, holing of cash, levels of credit, financial strategy, controlling cash flow for decision making.|
|Goal||Following up how the company performing accounting operation according to daily transactions.||To forecast the future planning according to business performance|
|Measuring Tools||Leger, Trial Balance, Profit and loss account, balance sheet and cash flow statement||Ratio analysis, Breakeven point leverage, Capital structure, cost of capital, company performance etc.|
|Fund determination||Revenue is pointing when sales occurred not for waiting for money collection. On the other hand, expenses will acknowledgment when payment occurs not for waiting for payment.||Revenue is occurring when actual cash is the receipt. On the other way expenses will occur when actual payment will be paid and both are written down cash flow|