Are you looking for a complete guide on bookkeeping? Then keep reading...
Bookkeeping is the process of recording a business's financial transactions, such as its sales, purchases, payments, and receipts, on a daily basis.
These records must be accurate and up-to-date and should be able to provide a clear picture of the performance of the business after a specific period.
Whenever any individual or corporate body buys anything from you or sells anything to you, you have to record the exact details of the transaction and keep the documents used to transact the business as backup evidence.
You would then use the individual records you have made to set up financial statements at the end of a period, which could be daily, weekly, monthly, or yearly.
Bookkeeping may involve historical records, but these records are very vital to the success of any business.
This book covers,
- WHAT IS BOOKKEEPING
- THE DIFFERENCES BEETWEEN ACCOUNTING AND BOOKKEEPING
- THE IMPORTANCE OF BOOKKEEPING
- OF BOOKKEEPING
- FUNCTION OF AN ACCOUNTING OFFICER
- WHAT IS AN ASSET
- WHAT IS A CURRENT ASSETS
- WHAT IS A NON-CURRENT ASSETS LIABILITIES
- CURRENT LIABILITIES
- NON CURRENT LIABILITIES
- BALANCE SHEETS
- DEBITS AND CREDITS
- RECORDING DEBIT AND CREDIT IN AN ACCOUNT
- WHAT IS A FINANCIAL STATEMENT
- WHY DO WE NEED A FINANCIAL STATEMENT
- BALANCE SHEETS
- WHAT TO INCLUDE IN BALANCE SHEET INCOME STATEMENTS?
- UNDERSTANDING THE INCOME STATEMENT
- THE CASH FLOW STATEMENT
- BOTTOM LINE ON FINANCIAL STATEMENTS
- CHOOSE A BOOKKEEPING SYSTEM
- CHOOSE AN ACCOUNTING METHOD: CASH OR ACCRUAL
- ORGANIZE AND STORE YOUR DOCUMENTS
- ORGANIZE POTENTIAL DEDUCTION
And much more!
Here are some of the very important reasons for bookkeeping:
- Bookkeeping provides a true and accurate picture of the business. To know how your business is performing, whether you are making gains or losses, growing or dwindling, the only way you can know these is if you keep accurate records.
- There is the issue of taxes; you have to be able to know just how much taxes you need to pay at the end of every year.
- It helps you easily forecast and create plans for your business. By looking at your bookkeeping records, you can easily say, "We always sell 500 units of X product every December, so this year, we should work on increasing our sales to XX units."
If you have investors or third parties such as shareholders or partners who would be interested in the performance of your business, well-kept books are the only way you can show them how your business is really doing.
- Through bookkeeping, you can also easily figure out thefts, dishonesty, or poor performances if you have employees or people running your business for you. Another benefit you can derive from adequate business bookkeeping is that you can use your financial statements as proofs of business performance if you need to secure loans for your business.Bookkeeping shall also help you monitor your business expenses in relation to income.
With that understanding on the importance of bookkeeping, let's now move on to understanding some key terms that are used in bookkeeping and accounting in general before we can get to the point of discussing how to go about bookkeeping
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