Social Question

RedDeerGuy1's avatar

Is this saying about accounting and finance correct (Details Inside)?

Asked by RedDeerGuy1 (24648points) May 25th, 2021

Accounting is about recording the present and past of money.
Finance is about the present into the future of money.

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4 Answers

doyendroll's avatar

Is the question moot?

RedDeerGuy1's avatar

@doyendroll I don’t understand? I am just wondering about what the two careers do.

LuckyGuy's avatar

That is an interesting take on the subjects.
An accountant that sets up accounting systems for small businesses would have a different opinion. That is work that helps the business in the future. But I agree with your statement that it is recording income and funds that have been spent or will be spent in the near future.
~This is an accountant.
~This is a financier .

Love_my_doggie's avatar

Accounting is a record-keeping function, focused on the day-to-day flow of assets within and without an entity. The goals are to have complete and accurate reporting and full compliance with laws.

Finance is the control, custody, management, and planning of assets.

@RedDeerGuy1, your assertion is somewhat correct. Accounting looks back to past transactions and knows current position; finance is more concerned with future growth. But, each discipline is broader than just that.

BTW, the two functions should never be mixed. Unfortunately, many entities make this mistake – believe that anything with a dollar sign should be handled by the same person. Consider an employee who has check-signing authority, can transfer money in-and-out of accounts, reconciles the bank statements, and keeps the books. This is a person who can do anything and cover his/her tracks with impunity.

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