Bookkeeping may be the recording of financial transactions. Transactions consist of product sales, purchases, earnings, and payments by an individual or organization. Bookkeeping is generally performed by a bookkeeper.

Bookkeeping should not be confused with accounting. The accounting procedure is usually performed by an accountant. The accountant creates reports from the recorded monetary transactions recorded by the bookkeeper and files forms with government agencies. There are some typical techniques of bookkeeping for example the Single-entry bookkeeping system and also the Double-entry bookkeeping program. But while these systems might be seen as “real” bookkeeping, any procedure that involves the recording of financial transactions is really a bookkeeping procedure.

A bookkeeper (or book-keeper), also recognized as an accounting clerk or accounting technician, is really a person who records the day-to-day financial transactions of an organization. A bookkeeper is generally responsible for writing the “daybooks.” The daybooks consist of buy, product sales, receipts, and payments. The bookkeeper is responsible for ensuring all transactions are recorded within the correct daybook, suppliers ledger, customer ledger, and general ledger. The bookkeeper brings the books towards the trial balance stage. An accountant may prepare the earnings statement and stability sheet utilizing the trial balance and ledgers prepared by the bookkeeper

Bookkeeping systems

Two typical bookkeeping systems utilized by companies as well as other organizations are the single-entry bookkeeping program and the double-entry bookkeeping program. Single-entry bookkeeping uses only earnings and expense accounts, recorded primarily in a revenue and expense journal. Single-entry bookkeeping is adequate for many small businesses. Double-entry bookkeeping requires posting (recording) every transaction twice, using debits and credits.

Single-entry system

The primary bookkeeping record in single-entry bookkeeping is the money guide, which is similar to a checking (chequing) account register but allocates the earnings and expenditures to various income and expense accounts. Separate account records are maintained for petty money, accounts payable and receivable, as well as other relevant transactions for example inventory and travel expenditures. Nowadays, single entry bookkeeping could be done with DIY bookkeeping software to speed up manual calculations.

Double-entry system

Main article: double-entry bookkeeping system

Daybooks

A daybook is really a descriptive and chronological (diary-like) record of day-to-day monetary transactions also called a book of original entry. The daybook’s details should be entered formally into journals to enable posting to ledgers. Daybooks consist of:

* Product sales daybook, for recording all of the sales invoices.

* Product sales credits daybook, for recording all of the product sales credit notes.

* Purchases daybook, for recording all of the buy invoices.

* Purchases credits daybook, for recording all of the purchase credit notes.

* Cash daybook, usually known as the money book, for recording all money received as well as money paid out. It might be split into two daybooks: receipts daybook for cash received in, and payments daybook for money paid out.

Petty cash register

A petty cash resgiter is a record of little value purchases generally controlled by imprest system. Items such as coffee, tea, birthday cards for employees, a few dollars if you’re short on postage, are listed down within the petty cash register.

Journals

A journal is a formal and chronological record of monetary transactions prior to their values are accounted in general ledger as debits and credits. Journals are recorded in the journal daybook, which is one from the books of first entry. For each and every debit journal there must an equivalent credit journal. There must be at least two journal entries for each and every transaction recorded.

Ledgers

A ledger is really a record of accounts, these accounts are recorded separately showing their beginning/ending stability. Unlike the journal, which lists monetary transactions in chronological order without displaying their stability but showing how much is going to be charged in each account. The ledger takes every monetary transactions from the journal and records them to the right account for every transaction listed. The ledger also sums up the total of every account which is transferred into the balance sheet and earnings statement. There are 3 different kinds of ledgers that deal with book-keeping. Ledgers consist of:

* Sales ledger, which deals mostly with the Accounts Receivable account. This ledger consists of the financial transactions created by clients to the company.

* Buy ledger is a ledger that goes hand and hand with the Accounts Payable account. This may be the purchasing transaction a company does.

* General ledger representing the original 5 main accounts: assets, liabilities, equity, earnings, and expenditures.

Chart of accounts

A chart of accounts is a list of the accounts codes that could be identified with numeric, alphabetical, or alphanumeric codes allowing the account to become located within the common ledger.

Computerized bookkeeping

Computerized bookkeeping removes numerous from the paper “books” which are utilized to report transactions and usually enforces double entry bookkeeping.

Online bookkeeping

Online bookkeeping, or remote bookkeeping, allows source documents and data to reside in web-based applications which permit remote access for bookkeepers and accountants. All entries created to the on the internet software program are recorded and stored in a remote location. The on the internet software could be accessed from any place in the world and permit the bookkeeper or data entry person to work from any location with a suitable data communications link.