Difference Between an Accounting and Finance Degree
Accounting vs Finance Degree
The terms accounting and finance will always be a source of confusion among students as to what really differentiates the two. The term accounting, in general, is the means by which accounting records are prepared, analyzed and interpreted. They are then reflected in well prepared financial statements. There are accounting principles that must be adhered to during the accounting processes, and these are known as GAAP (Generally Accepted Accounting Principles).
Inferences from the prepared financial statements may then be used for decision making, especially when they are of a financial nature, or help shed light on how past economic scenarios might help shape the future. Accounting information is generally free of errors and bias, therefore, it is considered quite reliable and timeless for decision makers to use as an influence when deciding on a firm’s financial future.
Accounting has generally been in existence for more years when compared to finance. The accounting degree has specific areas of study, which include financial accounting, cost accounting, auditing and taxation. Financial accounting involves learning about users of accounting information, and how the respective information is split between the two users, i.e. financial accounting and management accounting. Financial accounting information is for external users, like creditors and investors, while management accounting information is used by internal users for decision making purposes.
Financial studies, on the other hand, revolve around three interrelated fields: Macroeconomics – specifically capital markets; investments – which primarily deal with various investment portfolios available for companies and individuals; and business finance – which deals with the actual management of the company.
Investment studies involves looking at areas of investment for companies, as well as individuals. It’s important to acquire skills in investment analysis in order to be able to ascertain the feasibility of projects. You will also learn managerial finance studies, equipping you with skills that enable one to handle the financial services of a firm. Also, within managerial finance, is analysis of the financial performance of a company. Issues dealing with working capital, inventory levels, credit levels, and cash holding, are all covered by managerial finance.
Accounting generally deals with the preparation of accounting records, while Finance deals with investments, macroeconomics and business finance.
An accounting degree is generally divided into financial accounting, cost accounting, auditing and taxation, while finance broadly deals with macroeconomics and the like.
Accounting has generally existed for a longer time than the field of finance.
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