bookkeeping

(noun)

The skill or practice of keeping books or systematic records of financial transactions, e.g., income and expenses.

Related Terms

Examples of bookkeeping in the following topics:

  • Inputs to Accounting

    • In accounting, the two bookkeeping methods are the single-entry and double-entry bookkeeping systems.
    • Bookkeeping is the recording of financial transactions.
    • Bookkeeping is usually performed by a bookkeeper.
    • There are some common methods of bookkeeping such as the single-entry bookkeeping system and the double-entry bookkeeping system.
    • The bookkeeper brings the books to the trial balance stage.

  • Defining Accounting

    • One important breakthrough took place around that time: the introduction of double-entry bookkeeping, which is defined as any bookkeeping system in which there was a debit and credit entry for each transaction, or for which the majority of transactions were intended to be of this form.
    • The earliest extant evidence of full double-entry bookkeeping is the Farolfi ledger of 1299-1300.
    • It represents the first known printed treatise on bookkeeping; and it is widely believed to be the forerunner of modern bookkeeping practice.
    • Although Luca Pacioli did not invent double-entry bookkeeping, his 27-page treatise on bookkeeping contained the first known published work on that topic, and is said to have laid the foundation for double-entry bookkeeping as it is practiced today.
    • The invention of a form of bookkeeping using clay tokens represented a huge cognitive leap for mankind.

  • A short history of accounting and double entry bookkeeping

    • Modern bookkeeping is generally thought to have been invented during the Italian Renaissance (around 1494 AD, according to one version:
    • Pacioli wrote, were access to cash, a constantly updated accounting system and a good bookkeeper.
    • At any rate, the discovery of double-entry bookkeeping was undeniably important, because, as Wikipedia explains:
    • Double-Entry Bookkeeping is a system that ensures the integrity of the financial values recorded in a financial accounting system.
    • Here is a simple example to give you a feel for the way that double entry bookkeeping works:

  • Double-Entry Bookkeeping

    • A double-entry bookkeeping system requires that every transaction be recorded in at least two different nominal ledger accounts.
    • A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts.
    • There are two different approaches to the double entry system of bookkeeping.

  • Types of Transactions

    • In double-entry bookkeeping, a sale of merchandise is recorded in the general journal as a debit to cash or accounts receivable and a credit to the sales account.
    • Fees for services are recorded separately from sales of merchandise, but the bookkeeping transactions for recording sales of services are similar to those for recording sales of tangible goods .

  • Recording Sales

    • In bookkeeping, accounting, and finance, net sales are operating revenues earned by a company for selling its products or rendering its services.
    • In double-entry bookkeeping, a sale of merchandise is recorded in the general journal as a debit to cash or accounts receivable and a credit to the sales account.
    • Fees for services are recorded separately from sales of merchandise, but the bookkeeping transactions for recording sales of services are similar to those for recording sales of tangible goods.

  • Debits and Credits

    • Credit and debit are the two fundamental aspects of every financial transaction in the double-entry bookkeeping system.
    • Debits and credits are at the heart of the double-entry bookkeeping system that has been the foundation stone on which the financial world's accounting system has been built for well over 500 years.
    • Debits and credits serve as the two balancing aspects of every financial transaction in double-entry bookkeeping.

  • The Trial Balance

    • The trial balance is usually prepared by a bookkeeper or accountant.
    • The bookkeeper/accountant used journals to record business transactions.
    • The trial balance is a part of the double-entry bookkeeping system and uses the classic 'T' account format for presenting values.
    • If debits do not equal credits then the accountant or bookkeeper must determine why.

  • Basic financial statements

    • Next, we will discuss a short history of accounting and the invention of double-entry bookkeeping, a technique that is of great assistance to accountants and bookkeepers in assuring the accuracy of accounting records and the reports that are prepared from them.

  • Introduction to Provisioning

    • Roads, books, tools, telephones, the Internet, the legal system, property rights, double entry bookkeeping, dams, energy plants and distribution systems are examples elements of the infrastructure which facilitates individual effort.