Bookkeeping (also book-keeping or book keeping) is the recording of all financial transactions undertaken by an individual or organization. A financial transaction involves a change in the Status of the finances of two or more businesses or individuals An organization (or organisation &mdash see spelling differences) is a social arrangement which pursues collective goals which controls its own performance and The organization may be a business, a charitable organization or even a local sports club. A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to The definition of charitable organization, and of charity varies according to the country and in some instances the region of the country in which the charitable organization operates A sports club, athletics club or sports association is an eclectic institution oriented to multiple Sports which fields many Teams and in several Bookkeeping is "keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what is left. " [1] A financial transaction is any event that involves money.
Individual and family bookkeeping involves keeping track of income and expenses in a cash account record, checking account register, or savings account passbook. A transactional account ( North America: checking account or chequing account, United Kingdom and some other countries current account Savings accounts are accounts maintained by retail Financial institutions that pay Interest but can not be used directly as Money (by for example Individuals who borrow or lend money track how much they owe to others or are owed from others.
Bookkeeping may be performed using paper and a pen or pencil. With increasing complexity in tax regulations and to minimize calculation errors, many organizations use accounting software. Accounting software is Application software that records and processes Accounting transactions within functional modules such as Accounts payable,
Two common bookkeeping methods used by businesses and other organizations are the single-entry bookkeeping system and the double-entry bookkeeping system. Single-entry bookkeeping system also known as Single-entry accounting system is a one sided Accounting entry to maintain financial information In Accountancy, the double-entry Single-entry bookkeeping uses only income and expense accounts, recorded primarily in a "Revenue and Expense Journal". In Accountancy, an account is a label used for recording and reporting a Quantity of almost anything Single-entry bookkeeping is adequate for many small businesses. Double-entry bookkeeping requires posting (recording) each transaction twice, using debits and credits. Debit and credit are formal Bookkeeping and Accounting terms They are the most fundamental concepts in accounting representing the two records that one [2]
A bookkeeper (or book-keeper), sometimes called an accounting clerk in the United States, is a person who records the day-to-day financial transactions of an organization. [3] A bookkeeper is usually responsible for writing up the "daybooks. " The daybooks consist of purchase, sales, receipts and payments. The bookkeeper is responsible for ensuring all transactions are recorded in the correct daybook, suppliers ledger, customer ledger and general ledger. The bookkeeper brings the books to the trial balance stage. In accounting, the trial balance is a Worksheet listing the Balance at a certain date of each Ledger Account in two columns namely An accountant may prepare the profit and loss statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper. An accountant is a practitioner of Accountancy, which is the measurement disclosure or provision of assurance about financial information that helps managers investors An Income Statement, also called a Profit and Loss Statement (P&L is a financial statement for companies that indicates how Revenue (money In Financial accounting, a balance sheet or statement of financial position is a summary of a person's or organization's balances
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Single account bookkeeping
Simple bookkeeping for individuals and families involves recording income, expenses and current balance in a cash record book or a checking account register.
Sample checking account register (United States, 2003)[4]
| ¤AD-Automatic Deposit ¤AP-Automatic Payment ¤ATM-Teller Machine ¤DC-Debit Card | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| NUMBER OR CODE |
DATE | TRANSACTION DESCRIPTION | PAYMENT AMOUNT | / | FEE | DEPOSIT AMOUNT | BALANCE | |||
| balance forward | 1331 | 85 | ||||||||
| AD | 3/15 | paycheck | 1823 | 56 | 3155 | 41 | ||||
| AP | 3/26 | electricity | 104 | 31 | 3051 | 10 | ||||
| 704 | 3/26 | car registration | 58 | 50 | 2992 | 60 | ||||
| ATM | 3/30 | cash withdrawal | 100 | 00 | 1. 00 | 2891 | 60 | |||
| DC | 4/2 | groceries | 127 | 35 | 2764 | 25 | ||||
Single-entry bookkeeping
The primary bookkeeping record in single-entry bookkeeping is the Revenue and Expense Journal, which is similar to a checking account register but allocates the income and expenses to various income and expense accounts. Separate account records are maintained for petty cash, accounts payable and receivable, and other relevant transactions such as inventory and travel expenses. Inventory is a list for goods and Materials, or those goods and materials themselves held available in stock by a Business.
Sample revenue and expense journal for single-entry bookkeeping[5]
| No. | Date | Description | Revenue | Expense | Sales | Sales Tax | Services | Inventory | Advert. | Freight | Office Suppl | Misc |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 7/13 | Balance forward | 1,826. 00 | 835. 00 | 1,218. 00 | 98. 00 | 510. 00 | 295. 00 | 245. 00 | 150. 00 | 83. 50 | 61. 50 | |
| 1041 | 7/13 | Printer- Advert flyers | 450. 00 | 450. 00 | ||||||||
| 1042 | 7/13 | Wholesaler - inventory | 380. 00 | 380. 00 | ||||||||
| 1043 | 7/16 | office supplies | 92. 50 | 92. 50 | ||||||||
| -- | 7/17 | bank deposit | 1,232. 00 | |||||||||
| - Taxable sales | 400. 00 | 32. 00 | ||||||||||
| - Out-of-state sales | 165. 00 | |||||||||||
| - Resales | 370. 00 | |||||||||||
| - Service sales | 265. 00 | |||||||||||
| bank | 7/19 | bank charge | 23. 40 | 23. 40 | ||||||||
| 1044 | 7/19 | petty cash | 100. 00 | 100. 00 | ||||||||
| TOTALS | 3058. 00 | 1,880. 90 | 2,153. 00 | 130. 00 | 775. 00 | 675. 00 | 695. 00 | 150. 00 | 176. 00 | 184. 90 |
Double-entry bookkeeping
Footing
Footing and Cross-footing are bookkeeping terms for summing a table of numbers by column and by row, respectively. In Accountancy, the double-entry In British English, the terms casting and cross-casting are used. British English or UK English ( BrE, BE, en-GB) is the broad term used to distinguish the forms of the English language used in the
Computerised bookkeeping
Computerised bookkeeping removes many of the "books" that are used to record transactions and enforces double entry bookkeeping. In Accountancy, the double-entry Computer software increases the speed at which bookkeeping can be performed.
Online bookkeeping
Online bookkeeping allows source documents and data to reside in web-based applications which allow remote access for bookkeepers and accountants. Typically, a company scans its business documents and uploads them to a secure location or into an online bookkeeping application on a regular basis. This allows the bookkeeper to work remotely with these documents to update the books. Users of this technology include
- mobile employees scanning and sending in their receipts and bills while on the road to get reimbursed more quickly.
- organizations with multiple offices centralizing their accounting department and having the documents sent to this location online.
Notes and references
- ^ Fields, Louis W. (1990). Bookkeeping Made Simple, Revised Edition. Doubleday, 9-10. ISBN 0385238827.
- ^ Pinson, Linda; Jerry Jinnett (1993). Keeping the Books, Second Edition. Upstart Publishing Company, Inc. , 10. ISBN 0936894474.
- ^ Williams, Jan R. ; Susan F. Haka, Mark S. Bettner, Joseph V. Carcello (2008). Financial & Managerial Accounting. McGraw-Hill Irwin, p. 26. ISBN 9780072996500.
- ^ Illustration based on transaction register provided with personal checks from http://www.deluxe.com in 2003.
- ^ Pinson, p. 25.
Dictionary
bookkeeping
-noun
- accounting: the keeping track of, e.g., income and expenses
-verb
- Present participle of bookkeep.