Effective Bookkeeping Tips for Financial Transactions

Effective Bookkeeping Tips for Financial Transactions

Bookkeeping is part of accounting homework and is very important in finance. It is basically a recording of financial transactions. These transactions may include several entries such as sales, purchases, income, payments which are made either by an individual or by a company. Bookkeeping and accounting are two different things and many a time's people get mixed up, when they encounter these words. Accounting is a process, which is executed by an accountant. In accounting homework, a bookkeeper records the financial transactions and an accountant makes use of these in preparing reports. These reports are then filed with the government agencies, as per the requirements of the laws of the land.

Technically any process, which involves recording of a financial transaction, can be termed as a bookkeeping process. A bookkeeper, while doing accounting homework is involved in maintaining daybooks. These daybooks are to be completed by a bookkeeper on a daily basis. The data which is recorded in these daybooks consist of transactions related to payments, receipts, sales, purchase. The bookkeeper has to ensure that all these transactions are recorded correctly and in the relevant daybook and ledgers like supplier's ledger, customer ledger, and general ledger and so on. Finally, the bookkeeper is supposed to bring the books to the trial balance stage. The role of an accountant starts from there. He is responsible for preparing income statement and balance sheet with the help of trial balance and ledgers prepared by the bookkeeper.

In this type of accounting homework two methods are followed for bookkeeping namely single entry bookkeeping system and double entry bookkeeping system. In the single entry system of bookkeeping, only and income and expense accounts are used. These are recorded mainly in a revenue and expense journal. This type of system of maintaining the accounts is ideal for small businesses. Another accounting homework, Double entry bookkeeping system, as the name suggests, requires recording of each transaction twice, with the help of debits and credits.

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