ASSIGNMENT - 2
BOOK KEEPING
SUBMITTED BY: -
NISHANT SINGH (B)
POOJA ARORA (A)
RUPINDER KUMAR (C)

What is Bookkeeping?

Bookkeeping, commonly referred to as keeping the books, is the process of keeping full, accurate, up-to-date business records. Proper bookkeeping can help businesses effectively manage cash flow, stay abreast of profits and losses, and develop plans for the future based on financial trends. Furthermore, accurate bookkeeping is required by both federal and local tax agencies. Bookkeeping involves making a record of the monies received by a business.

Bookkeeping is a process in which the financial records of a business are kept well organized and up-to-date. This whole process entails various different activities performed by the business owners or bookkeepers such as recording the financial transaction, maintaining the complete records of the sales, purchases and the payments made or received. Bookkeeping enables business owners to take important business decisions understanding the profit margins and debts that the company owes.

Various Bookkeeping Duties

When asked "what is bookkeeping?" I say that the integral component of the bookkeeping operations is to organize the cash flow on a regular basis. It is not that always professionals are required for bookkeeping and as far as small businesses are concerned, it can be done by the business owner also. As per the various bookkeeping duties, there are different titles given to bookkeepers such as auditing clerks, billing clerks, financial clerks, payroll clerks and accountants.

What is Bookkeeping Systems

There are two bookkeeping systems on the basis of which bookkeeping operations are carried out; namely single entry system and double entry system. In the single entry system, expense accounts and revenues are required to maintain the financial transactions. This single entry system is suitable for small businesses as in them the daily financial transactions are quite less than the big ones.

In a double entry system, the ledgers, the balance sheets, debits, credits and the tax payments are maintained. In a double entry system, there are primarily 2 phases, in the first one the records are maintained and in the second one, the errors present in the financial documents are rectified.

Types of Books Used In Bookkeeping

The bookkeeping operations include maintaining financial records in more than one format. There are basically 3 types of books that are included in the bookkeeping operations namely daybooks, journals and ledgers.

In the daybooks, detailed financial statements are recorded on a daily basis. The information stored in the journals is such that is not included in daybooks as there are many small businesses that do not maintain daybooks. Ledgers are basically books that contain the total finances in the form of credits, debits, sales, purchases and cash payments.

What Is Computerized Bookkeeping?

Computerized bookkeeping is one in which the financial transactions and other financial details are maintained in computers. The speed of performing calculations is fast in computerized bookkeeping as compared to the traditional one. The big business houses that have lot many financial records to be maintained can opt for this computerized bookkeeping as it would save a fair amount of time.