J. R. Baltiboi has observed that Bookkeeping is the art of recording business dealings in a set of books. Bookkeeping is the science and art of systematically recording, classifying and summarizing the financial transactions or events of a business in a set of books. A business transaction means the exchange of money or items of value between two or more persons. Anytime this occurs, bookkeeping comes into play.
It has been noted that the process of accounting begins as the business transaction occurs. Once a business transaction takes place it is recorded in the books of accounts. This process starts with recording transactions in the primary-entry cash book, bank book, sales book, purchase book, debit note/credit notebook and journal. These are regarded as the books of primary entry where transactions are first recorded.
Transactions are then posted to the ledger account. This is called the ledger posting. The balancing of each ledger account is done at periodic intervals which cannot be longer than one year. Many organizations do it on a monthly, quarterly or half-yearly basis.
The trial balance is prepared from the ledger balances. In this statement, the totals of debits and credits must agree with each other. This is the test of arithmetical accuracy of recording, posting and totaling. The debits and credits must tally.
Many necessary adjustments and provisions are made to ensure that accounting is done in conformity with the Generally Accepted Accounting Principles (G A A P). These rules and regulations are universally adopted by the accountants in recording accounting transactions.
Related Articles of Interest :
-
Bookkeeping
10 August 2010 8:30 PM |
No Comments
Bookkeeping is the science and art of systematic recording, classifying and summarizing of financial transactions or events of a business in a set of books. A business transaction means the exchange of money or items of value between two or more persons. Spicer and Pegler...
-
Double Entry Bookkeeping
10 August 2010 8:30 PM |
No Comments
Double-entry Bookkeeping is one of the standard accounting practices for recording financial transactions. Five hundred years ago it was codified for the first time by Luca Pacioli. The conceptual framework is that a business can be described by a number of different accounts, each describing...
-
Bookkeeping Courses
10 August 2010 8:30 PM |
No Comments
Accounting is more than just memorizing terms and procedures; it’s a whole new way of thinking about finances. Understanding basic Bookkeeping procedures is vital to developing and controlling activities in business. Every company seeks the talented Bookkeepers. It is necessary that students of Bookkeeping must...
-
Bookkeeping Software
10 August 2010 8:30 PM |
No Comments
The process of Bookkeeping is cumbersome. Small human errors can cause big damage to the company. Computers have made this hectic process very easy. Computerized Bookkeeping simplifies the Bookkeeping and accounting procedures. Speed, accuracy, automation and versatility make computers better accountant than humans, and provide...
-
Online Bookkeeping Course
10 August 2010 8:30 PM |
No Comments
Understanding basic Bookkeeping procedures is vital to developing and controlling activities in business. Every company seeks talented Bookkeepers. It is necessary that students of Bookkeeping must be interested in gaining knowledge of basic Bookkeeping practices to plan a profitable future or seek a new career....
-
Bookkeeping Jobs
10 August 2010 8:30 PM |
No Comments
Bookkeeping jobs require people to track companies’ expenses, and prepare, analyze and validate financial documents. They look for ways to run businesses more efficiently, keep public records and make sure taxes are paid properly. They keep updating the journals and ledger books of the company....
-
Bookkeeping Services
10 August 2010 8:30 PM |
No Comments
In a changing world, with globalization, technological advances and a continual revalidation of methods of doing business, business owners have choices when it comes to managing time and business. A business owner can spend much of his/her time expanding the business, or buried under paperwork,...
-
Accounting
10 August 2010 8:30 PM |
No Comments
The word accounting has several definitions, as it is used in many different contexts. But broadly, it can be defined as the process of collecting financial information, recording it, and then presenting it in the form of financial statements. Accounting provides basic information about financial...
-
Accountant
10 August 2010 8:30 PM |
No Comments
An accountant is a person who manages financial issues, including the preparation of financial plans and budgets, as well as the management of accounts and staff welfare. In most countries, officially licensed accountants are recognized by titles. In the UK, they are termed as “chartered...
-
Accounting Education
10 August 2010 8:30 PM |
No Comments
Accounting education helps you gain a systematic knowledge of the various skills and practices involved in business and accountancy. Accounting is the systematic recording, reporting, and analysis of financial transactions of a business. The history of accounting is as old as civilization. Accounting education has...