Finance and accounting terms are often used interchangeably. Although both are related to the management and administration of the organization’s assets, each contains significant differences in scope and focus. When it comes to evaluating and developing the financial strategies of your company or department, it is important to have a working knowledge of both courses.
To understand the difference between finance and accounting, you need to know what each term means.
WHAT ARE MONEY?
Finance refers to the way a person or an organization makes and uses money — in other words, the way an organization handles its money. This often involves activities such as investing, borrowing, borrowing, budgeting, and forecasting.
The financial sector can be categorized to sharpen certain types of stakeholders, including personal finance, business finance, and public finances. Although these categories usually cover the same set of activities, each type of finance has nuances that reflect different regulations, assumptions, and concerns for each population.
WHAT IS SLEEP?
Accounting, on the other hand, refers to the process of reporting and communicating financial information about an individual, business, or organization. Rather than making strategic financial decisions, accounting captures an accurate summary of a group’s financial situation over time — a trend that results in information often based on financial activity.
Common tasks involved in accounting include recording activities, collecting financial information, compiling reports, and analyzing and summarizing performance. The results usually include complete financial statements — including income statements, balance sheets, and cash flow statements — that are used to determine an entity’s position over a period of time.