ACCOUNTING AND  BOOKKEEPING

Accounting is one of the most important activities of the company, and it is also one of fastest growing career field today, because without the good financial records, we will not know how much income taxes that we have owed the government, how much money we can safely borrow from the bank, how much money we can invest in the new project, or how much profit we can gain from the business.

The Role of Accountant

Many people confuse the bookkeeping and accounting. They think the accounting is nothing more than glorified bookkeeping. In fact, they are related, but they are not the same. The bookkeeper is responsible for keeping the company’s financial records. Much of the bookkeeper’s work is clerical. Currently, this work is gradually done by the computer.

The duty of the accountant is to design a system for keeping the financial records, to prepare the financial statements, and to interpret these statements. But an accountant’ s first job frequently involves some bookkeeping because it is important for accountant to understand exactly what bookkeeper does. The bookkeeper is usually supervised by accountant.

The difference between the managerial accounting and financial accounting is as below:

The managerial accounting is concerned with providing the management with the financial information needed to operate the company.

For Example:

Toyota Sales Department may need to know how many Toyota Camry Cars have been sold in Cambodia per year.

The financial accounting is concerned with providing financial information to people outside the company.

Examples of such information are financial statements including income statements, balance sheet and the tax statements which are prepared for the government.

There are two types of accountants: Public and Private accountants. Although their roles are different, they often work closely together.

Public Accountant does not work for the single employer and he can makes his service available to the public. His duty is to provide a variety of financial services to their clients. These services include helping the small firms or individual prepare their income tax and analyzing the merit of property purchase and providing the audit services for many small and medium sized businesses.

Private Accountant works for only one company. He supervises the bookkeepers, prepares the financial statements, and advises the top management as to the financial position of the company. Sometimes, he also works as the internal auditor.

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