Relation among Bookkeeping, Accounting, and Accountancy [Notes with PDF]

In this article, we will learn in-depth about the relation between bookkeeping, accounting, and accountancy.

Bookkeeping, Accounting, and Accountancy

Many of us try to use the same meaning in bookkeeping, accounting, and accountancy. However, bookkeeping, accounting, and accounting are not identical and cannot be used for the same purpose.

Now we try to understand what bookkeeping, accounting, and accountancy are? And how they connect with each other.


The term “Bookkeeping” refers to the method of keeping a trader’s books of account in a systematic manner.

The main objective of bookkeeping is to analyze and record financial transactions in the account books correctly and permanently. Thus the bookkeeping function is to record transactions in journals, position them in ledger accounts, and at the end of each accounting period to determine ledger balances of ledger accounts, etc.


Accounting refers to the process of identification. Measurement and communication of economic information to allow informed judgments and decisions of users of the information.

The main objective of accounting is to determine financial performance and financial position and to prepare reports after the interpretation of the financial performance and financial position referred to above.

For this reason, Egleston said that “Accounting may be considered as beginning where bookkeeping leaves off.”  Therefore the main function of accounting is to prepare financial statements and reports to control each accounting unit’s assets and liabilities.


The discipline that deals with the impact and outcome of a person or organization’s financial activities is called accountancy.

The primary objective of accountancy is to determine and implement accounting and bookkeeping principles, theories, and systems.

For this reason, F.W Pixely said “The basis of accountancy is the bookkeeping theory and practice.” So the theories are the basis of accountancy.

Therefore it is not possible to use bookkeeping, accounting, and accountancy in the same sense, but they are interrelated. In short, it can be said that the first stage is bookkeeping, accounting for the summary of both phases of financial transaction recording.

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