3 Comments for What Is The Different Between Finance And Accounting?

• 1. "FLAWLES  |  October 14th, 2009 at 10:26 pm

  Fundamentally accounting deals with hard numbers, or in some cases, proxies for hard numbers (like good will, to which a currency-based value can be assigned). Finance was developed out of accounting practice by international companies like IBM and GE that needed to incorporate strategy into their evaluation of hard numbers, which is called performance. An analogy is the field of marketing which was developed out of sales for similar reasons. In both cases, the impact of market forces is incorporated into performance projections to forecast what the numbers mean. Finance studies trends, benchmarks, projections, impact, and return on investment, among other things. Accounting provides the data for these considerations. That data includes profit and loss. As for liability, it is calculated both in real terms, i.e. what you owe or the value of what you own; and in soft terms, what your exposure to risk is. Wall Street will evaluate a tobacco or pharmaceutical company in terms of the potential loss from a law suit and count this as a liability. Finance does include money management and investment.

• 2. Ellen P  |  October 14th, 2009 at 10:28 pm

  it is practically correct in common sense. Acctg accounts the assets and liabilities for the balance sheet purposes & the sales and expenses for the profit/loss for a certain period. In some (big) companies acctg is a part of Finance.

• 3. ?  |  October 14th, 2009 at 10:40 pm

  You finance to finance and account to accounting. LOL

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