Are you thinking about making your career in finance and accounting? But confused, what major to choose between both? Then don’t worry! It is normal to decide what major to choose. Especially when you are interested in two or three subjects. Several students are struggling with choosing an accurate major for themselves. Don’t panic, if you are one of them. From this blog, you will be able to choose between finance and accounting. Because we are going to discuss Finance vs Accounting. It will help you in learning the main difference between them.
So, let’s start with an overview of both fields.
Finance VS Accounting: Overview
Finance is different from accounting. Accounting focuses on the day-to-day movement of money in and out of a firm or organization. On the other hand, Finance focuses on the management of assets and liability as well as future growth planning.
However, if you are learning Finance Assignment Help, you should learn both majors in detail.
Finance
Finance is the study of how a person or company collects and manages capital. In other words, how they manage their money. For example, managing the activities of investing, borrowing, lending, budgeting, and forecasting.
Moreover, the different types of finance are;
- Personal Finance
- Corporate Finance
- Public Finance
While these categories usually comprise a similar set of operations. Each form of finance has its own set of characteristics.
Accounting
On the other hand, accounting gathers, reports, and presents financial data about a person or organization. It focuses on the recording of financial status at a certain point in time. In other words, accounting is information that is based on financial activities.
The activities of accounting generally include;
- Documenting Transactions
- Gathering Financial Information
- Preparing Reports
- Assessing And Summarizing Performance
The outcomes contain numerous detailed financial statements. Income statements, balance sheets, and cash flow statements are examples of financial statements. However, to analyze an organization’s current status, accountants use these financial statements.
In Addition, Different Types of Accounting Are;
- Managerial Accounting
- Financial Accounting
Moving further in the discussion of Finance vs Accounting. Let’s discuss the main difference between them.
Finance VS Accounting: Key Points Of Difference
Following are some points of difference between finance and accounting.
Finance VS Accounting: Scope And Focus
On the different levels of the asset management spectrum, finance and accounting work at separate levels. Finance is fundamentally forward-looking. All value originates from the future. Whereas, accounting gives a view of an organization’s financial status using past and current transactional data.
Finance VS Accounting: Performance
Most firms use the accrual method of accounting. It records transactions as they are agreed upon rather than as they are performed. Finance allows for credit or deferred payment transactions. It works on the assumption that revenues and costs will level out over time to reflect economic reality. This allows for year-over-year comparisons of a company’s sales, costs, and profits.
On the other hand, finance believes that the greatest approach to estimate a company’s economic returns is to estimate the cash. It can earn and borrow, which is dependent on when that currency is exchanged.
Finance VS Accounting: Assessing Value
Another aspect of the distinction between both fields is how they see the value. Accounting generally uses the conservatism principle. It recommends that corporations should report lower expected asset values and greater estimates of liabilities.
In other words, if you do not know the exact worth of anything, you count it as zero under this philosophy. As a result, it helps businesses to avoid overextending themselves by underestimating the value of their assets.
On the other hand, it is different in the case of finance. Finance uses an analytical process, named valuation. It estimates the value of a business, project, or asset.
Finance VS Accounting: Career Opportunities
For some people, finance vs accounting is a matter of curiosity. But it is critical when picking a college major or a job. Undoubtedly, you want to be sure that you are on the correct path.
If you choose accounting, you have to give all the reports to the company’s chief financial officer. Controller, Tax Manager, Fund Accountant, Valuation Analyst, or Financial Reporting Accountant are all possible job titles.
Additionally, you can also work for yourself, a corporation, or the government as a Tax Accountant, Bookkeeper, Treasurer, or Auditor.
As an accountant, you will be responsible for tracking and reporting money movements. They use Generally Accepted Accounting Principles (GAAP). Moreover, you will learn tax law as well.
You get a broader number of alternatives if you pick finance. Financial analysts, investment bankers, financial examiners, personal financial advisors, and money managers are all options. Consulting or corporate finance are two options. Finance majors can also work in banking and insurance underwriting. Of course, entrepreneurship is another option for financial professionals.
Finance VS Accounting: Salaries
In the fields of finance and accounting, there is a large income range. Both jobs are predicted to grow quickly between now and 2024, according to the Bureau of Labor Statistics.
In 2014, the typical salary for a Financial Analyst was $78,620 per year. The number of Financial Analyst positions is expected to expand at a quicker speed of 12% between 2014 and 2024.
The average yearly income for accountants and auditors is $65,940. Between 2014 and 2024, the number of employment will expand by 11%, which is an above-average pace of growth.
Final words
However, in the above blog, we have discussed finance vs accounting. Both fields are good enough to make your career in it. If you choose accounting, you do financial transaction recording and reporting. Whereas, if you choose finance, you rely on the accounting department’s clear and precise work.
As a result, Both disciplines need a high degree of expertise, education, and experience. Both can deliver demanding work that is highly rewarded.