Accountancy vs Commerce
Accountancy and Commerce are two subjects that are often confused in terms of their content and meaning. Accountancy is the process of communicating financial information about a business firm to related people such as managers and shareholders.
On the other hand commerce is the exchange or barter of goods and services from the place of production to the place of consumption. Commerce is done to satisfy human wants.
The communication in accountancy is generally in the form of financial statements. It is important to know that the information regarding statements is selected as according to its relevance to its users such as managers and shareholders. On the other hand commerce consists in the trading of entities with economic value such as goods, information, services and money.
It is important to know that there are several branches or fields of accounting such as cost accounting, financial accounting, forensic accounting, fund accounting, management accounting and tax accounting. On the other hand commerce includes several systems that are in use in any given country. These systems include economic, legal, cultural, political, social and technological to name a few.
Accountancy is defined as ‘the profession or duties of an accountant’. It is interesting to note that accountancy has a special definition according to the American Institute of Certified Public Accountants (AICPA). It says accountancy is ‘the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof’.
On the other hand commerce is a system that has its bearing on the economic status of a country or a state for that matter. In short it can be said that commerce has its influence on the business prospects of a given country. Experts call commerce as the second wing of business which includes barter of goods from producers to users.
On the contrary accountancy is described as the language of business since it is the way by which financial information pertaining to a business firm is reported to different groups of people that are directly or indirectly associated with the firm. The direct users are the managers and the shareholders whereas the indirect users are the general public and the potential investors.
It is important to understand that commerce implies the abstract ideas of buying and selling whereas accountancy implies the process of reporting the financial statements.