Introduction to Basic Bookkeeping
What is Bookkeeping?
Bookkeeping
involves the recording, on a daily basis, of a company’s financial
transactions. With proper bookkeeping, companies are able to track all
information on its books to make key operating, investing, and financing
decisions.
Bookkeepers are individuals who
manage all financial data for companies. Without bookkeepers, companies would
not be aware of their current financial position, as well as the transactions
that occur within the company.
Importance of Bookkeeping
Proper bookkeeping gives
companies a reliable measure of their performance. It also provides information
on general strategic decisions and a benchmark for its revenue and income
goals. In short, once a business is up and running, spending extra time and
money on maintaining proper records is critical.
What is a Financial Transaction?
Financial Transaction is an event involving the sale of
goods or services, payment of bill or expense, deposits or borrowing of money,
or buying or selling of property. It is an activity that changes the value of
the assets, liabilities, or owner’s capital of a company or business entity.
Four Main Types of Financial Transactions:
• Sales
• Purchases
• Receipts
• Payments
HOW TO RECORD FINANCIAL TRANSACTIONS
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