Difference Between Finance and Accounting?

[Spooner]

How would you answer someone's question that asked you that?

 

[conjur]

I tend to think of Finance as those who determine how much to spend (and how to acquire that money) and how to spend it among departments and then Accounting tracks that spending and categorizes it properly for tax purposes.

 

[wyvrn]

Accounting is record keeping. You match debits and credits, assets against liabilities and shareholder's equity. It shows cashflow, accounts payable and receivable, depreciation, inventory methods (FIFO, LIFO), and basically just tracks the money in the corporation and where it goes.

Finance has a lot of analysis. You look at different types of investments and compare them using formulas. You determine how changes in policy will affect earnings. It also deals how to obtain finances (banks, real estate, etc..) and how the company invests what is left over. Companies use accounting information in order to make financial forecasts on how their company is doing and how changes in money handling will affect its financial standing.

 

[theknight571]

Finance is the making, spending, and general control of the money.

Accounting is the means of covering up the finance activities..

- TK

 

[Jzero]

Finance is how much money you have.
Accounting is how you hide your finance from the IRS.

Edit: Bastard theknight beat me to it

 

[Electric Amish]

Yeah, accounting is magic, IMO. I don't get it...

amish

 

[cipher00]

Finance is slightly broader, but they're both boring as all get-out.

 

[statetech]

finance is making the money
accounting is counting the money

 

[b0mbrman]

Finance is managing money, banking, investments, securities, and credit
Accounting is making lists of money, banking, investments, securities, and credit

 

[linuxboy]

man, those are some long explanations. All you need to remember is that in finance, CASH is king. Meaning that cash matters and where the cash goes and where it comes from is what you're concerned about (cash flow). In accounting, you deal with making sure your books balance and doing what is necessary for that to be true.


Cheers !

 

[tcsenter]

Finance = the management of money and capital

Accounting = the detailed paper-trail documenting the management of money and capital

 

[Hayabusa Rider]

Finance makes the mess, accounting cleans it up.

 

[HamSupLo]

accounting is counting beans

 

[BrunoPuntzJones]

Word from the wise (not me silly, many profs), if you are looking at either a BBA in finance or accounting, go with accounting. Accounting students cover probably 70% of what finance students do, while finance students cover almost nothing in accounting. So with accounting you get the best of both worlds; a thorough understanding of financing (PBOs, WACC, Investments, a billion things), and you get the wonderfully fun accounting stuff :disgust: You have to know what's going on in order to be able to record it correctly.

You could get an accounting degree and then go back and get a finance degree with almost no problem if you understood it the first time around.