WHAT?

                                              WHAT IS BOOKKEEPING?🤔

INTRODUCTION                                                      

Bookkeeping and the recording of company transactions are related. Businesses and other organizations engage in transactions involving the exchange of money or its equivalent. All of these efforts are documented in order to make critical judgments about whether or not to proceed with them based on their viability, profitability, and general appeal. Owners and managers of businesses and other organizations, as well as a number of other stakeholders like the government, investors, customers, employees, and researchers, all want information about the business and other organizations.

MEANING

The process of daily recording your company's financial transactions into well-organized records is called bookkeeping. It may also refer to the various recording methods that companies have at their fingertips. For several reasons, bookkeeping is a crucial component of your accounting procedure. You may produce precise financial reports that help in measuring the success of your company when you maintain up-to-date transaction records. Additionally useful in the event of a tax audit are comprehensive documents.

To put it simply, "book-keeping" refers to the methodical recording of commercial activities in the books of accounts. In order to obtain reliable business results from these records at the conclusion of the accounting year, all financial transactions are recorded datewise.

The systematic recording, classification, and summarization of a business's financial transactions over a given time frame, typically a year, is the art or science of bookkeeping.

An accounting year is a year is a period of 12 months which begins on the 1st april and ends on 31st march of the next year.

DEFINITION

Richard E. Strahelm : “The art of analyzing and recording business transactions, reporting results of business operations through periodic statements and interpreting such results for purposes of effective control of future operations.” 

J. R. Batliboi : “Book-keeping is an art of recording business dealings in a set of books.” 

Nocth Cott: “Book-keeping is an art of recording in the books of accounts the monetary aspects of commercial or financial transactions.” 

R.N. Carter : “Book-keeping is the science and art of correctly recording in the books of accounts, all those business transactions that results in transfer or money or money’s worth.”

FEATURES OF BOOK KEEPING

 

1) It is a way of keeping record of daily commercial transactions. 

2) The records only include financial transactions. 

3) All documents are created for a specific period of time and are helpful for future reference. 

4) Transaction records are governed by rules and regulations. 

5) Scientifically documenting business transactions is an art.

OBJECTIVES

1)Keeping complete and accurate record in orderly and systematic manner.

2)Date wise and account wise recording.

3)Permanent recording of monetary transactions.

4)To know profit or loss of an enterprise.

5)To know total assets and liabilities.

6)Helps comparison of its financial results with other businesses in similar line and businessman learns how this year has progressed over previous years. 

IMPORTANCE OF BOOK KEEPING:

1) Maintains record of all the transactions permanently.

2) Gets information related to Profit, Loss, Assets, Liabilities, Investments and Stock.

3) Provides Financial information for decision making.

4) Enables control over activities of business.

5) Provides financial evidence needed in court of law.

6) Useful to calculate income tax liability, property tax, GST. 

Utility of Book-keeping:

• Owners
• Management
• Investors
• Customers
• Government
• Lenders
• Development