What is bookkeeping in Accounting? Book-keeping is how to keep a record of business transactions. Bookkeeping is often routine and clerical in nature. It is important to note that only those transactions related to business which can be expressed in terms of money are recorded. The activities of book-keeping include recording in the journal, posting to the ledger and balancing of accounts. Bookkeeping in accounting means collecting, recording, storing and retrieving of financial transactions for an entity.
Bookkeeping is done by bookkeeper will requires basic financial principles of debits and credits and a basic understanding of financial accounting, which includes the balance sheet and income statement.
In bookkeeping in accounting process a bookkeepers keep track of financial records for companies and organizations. In order to ensure that financial statements are updated and accurate. Bookkeeper will ready to understand, and how to use spreadsheets and database software programs. The financial statements may be prepared from bookkeeping and it will include expenditures, debts, receipts, accounts payable and receivable, invoices and profits.
Bookkeeping, in business, is the recording of financial transactions, and is part of the process of accounting. Transactions include purchases, sales, stocks, income and expenses by business organization. The accountant shall make financial reports on the basis of the financial transactions recorded by the bookkeeper and files forms with government and other authority. Bookkeeping is done by two methods such as the single-entry bookkeeping system and the double-entry bookkeeping system. Bookkeeping is usually performed by a bookkeeper. In worldwide Average Pay for Bookkeeper is more than earnings a civil engineer per year. Now lot of persons doing Bookkeeping Jobs from Home. They are doing these works through online bookkeeping software. Basically bookkeeping and payroll software works well in lot of accounting firms. However accounting bookkeeping courses are helpful for if you want to learn the fundamentals of accounting.
Objectives of bookkeeping in accounting
- To have permanent record of all the business transactions.
- To keep records of income and expenses in such a way that the net profit or net loss may be calculated.
- To keep records of assets and liabilities for the purpose of financial position of the business may be ascertained.
- It aims to records made available in future purpose.
Accounting Bookkeeping roles include –
- Accounts payable clerk
- Accounts receivable clerk
- Auditing clerk
- Payroll clerk
- Store keeper etc.
Advantages of Auditing bookkeeping?
- Easy to understand the process,
- Simplicity – to operate and maintain,
- Less expensive to maintain bookkeeping systems,
- Trained person are not required,
- Different methods are followed depends on size of the entity,
- Business progress ascertainment,
- It will gives net results of business entity
Disadvantages of Bookkeeping?
- It is often routine nature and does provide not analytical results,
- Double-entry bookkeeping system is complex to understand than single entry bookkeeping.
- Theft and other losses are less likely to be detected.
- Manual bookkeeping is needed more time than use of technology software.
- Bookkeeping work is through with the use of computer software and technology use will reduce time and errors on the records.
Bookkeeping in accounting is primary work in any type of financial reporting. Bookkeeping is basic and first process then only bookkeeping function will be useful to complete the final accounts of business concern.
Originally posted 2014-09-26 15:45:58.