- Book keeping is the process of recording financial transactions in a systematic way, while accounting is the process of interpreting, classifying, analyzing, reporting, and summarizing financial information.
- Double-entry bookkeeping is a method of recording financial transactions in which every entry to an account requires a corresponding and opposite entry to a different account.
- The earliest known bookkeeping system dates back to ancient Mesopotamia and was used by the Babylonians as early as 2600 BC.
- The modern system of double-entry bookkeeping was first described by Italian mathematician and Franciscan friar Luca Pacioli in his 1494 book “Summa de Arithmetica, Geometria, Proportioni et Proportionalità”.
- Accounting is considered the language of business as it provides financial information that is essential for making business decisions.
- In the United States, the Generally Accepted Accounting Principles (GAAP) are the standard set of guidelines for financial accounting.
- In the United Kingdom, the Financial Reporting Council (FRC) sets the Financial Reporting Standards (FRSs) for financial accounting.
- Forensic accounting is a specialized field of accounting that involves using accounting, auditing, and investigative skills to detect and investigate financial fraud.
- The International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that are used in over 120 countries.