What is the difference between finance and accounting?

Answer 1

Accounts have to do with the daily records of financial activities of an organization. Accounts are managerial level it includes recording classifing summerising the results to the stake holders of the company.

Finance deals with the admisterial level it includes various decisions like procurement of funds invest them in proper manner and distributing of funds to interested parties.

Thus when compare the scope the scope of finance is greate than accounts.

Accounts is the parts of finance whereas finance means the analysis of cost and fund for future requirements.

Answer 2

Over the years of teaching Finance, entering students would often ask "What is the difference between Finance and Accounting?" Oftentimes they were worried that they didn't do well in accounting and so would not fare well in finance. So I would talk about how finance differed from accounting and economics and some of the other courses they had already encountered. Mostly what I tried to do was to let them know that Finance was mostly about common sense principles.

1. Finance does indeed rely on accounting statements and records. Managerial finance professionals and investors make great use of accounting statements.
2. There are a number of different types of finance, including Personal Finance, government finance, and Business Finance.
3. Business finance can include managerial finance, investor finance and small business finance. All these entities, however, have two common finance functions – the Financing Function and the Investing Function.
4. The Financing Function
Where to get funds - Companies can borrow money or obtain from owners.
When to get funds - this involves timing. Should a company obtain all its financing requirements for the next 5 years or just to cover its immediate needs? Much of the answer may depend on the prediction of interest rate changes.
How much to pay for funds? This is a critical question. Some of this involves the timing question, some involves other factors.
5. Investing - What to do with funds once raised. Companies have to figure out what to do with the money they have raised. Do they invest in capital assets, start another product line, give raises, pay dividends, etc?

Businesses have to answer these questions, but so do governments and households. So at the risk of oversimplification, the functions of finance are the financing and investing functions. Accounting supplies the records and accounting information to assist in these functions.