Book-keeping, Accountancy, and Auditing
Let’s learn about Book-keeping, Accountancy, and Auditing.
Book-keeping: It is concerned with the systematic recording of transactions in the books of original entry and their posting into the ledgers. It involves.
- Journalizing
- Posting into ledger
- Totaling of different accounts in the ledger
- Balancing
Accountancy: Accounting begins where Book-keeping ends. “It means that an accountant comes into the picture only when the book-keeper has done his job. The functions of an accountant can be classified as under:
- Inspecting the work of the bookkeeper
- Preparation of trial balance
- Preparation of Trading and Profit and Loss accountant
- Preparation of Balance Sheet
- Passing Entries for rectification of errors and making adjustments
Auditing: Auditing begins, where accountancy ends. “An auditor has to verify the entries passed by the accountant and the final accounts prepared by him. Auditing is, therefore a critical and independent examination of the accounts with the help of vouchers, documents, and the information thus obtained. The job of an auditor is thereof to ensure after due verification and thorough scrutiny of accounts as to whether the transaction entered into the books are legitimate or not. Note that an auditor is required to submit his report to the effect of whether or not the Balance Sheet is true to the representation of the existing state of a business concern.
