17/05/17 The Difference between Accounting and Finance
Accounting is the process of creating and managing financial statements which record the day to day transactions of the business. Finance has a broader scope and is responsible for initiating transactions to aid in cash, investment and other working capital management.
Accounting and finance are both forms of managing the money of the business, but they are used for two very different purposes.
- Accounting is the practice of preparing accounting records, including measuring, preparation, analyzing, and the interpretation of financial statements. These records are used to develop and provide data measuring the performance of the firm, assessing its financial position, and paying taxes. Finance, on the other hand, is the efficient and productive management of assets and liabilities based on existing information.
- Finance is the study of money and capital markets which deals with many of the topics covered in macroeconomics. It is the management and control of assets and investments, which focuses on the decisions of individual, financial and other institutions as they choose securities for their investments portfolios. Also, managerial finance involves the actual management of the firm, as well as profiling and managing project risks.