Bookkeeping is the methodical recording of everyday transactions such as sales, purchases, receipts, and payments. It entails the correct and timely recording of financial transactions in journals and ledgers, as well as the creation of financial statements such as the balance sheet, income statement, and cash flow statement. Bookkeeping and accounting are both important functions for managing the financial records of a business. Accounting, on the other hand, involves a larger variety of operations than bookkeeping. It entails the study, interpretation, and communication of financial data to assist business owners, managers, and investors in making educated decisions. Accounting activities include financial analysis, budgeting, forecasting, auditing, and tax planning.