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05/01/2021 Book-keeping
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Book-keeping
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Published on Feb 8, 2014
Book-keeping and accounting cycle.
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Published in: Education, Business, Economy & Finance
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Usha Rani , CSR Cordinator LEAF Society at Hospital Authority

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Book-keeping
1. 1. BOOK-KEEPING The main aim of every business is to earn profit. Profit is nothing but the excess
of Income over expenditure. So to calculate profit the businessman must record the incomes and
expenditure related to his business, this recording of business transactions is called book keeping. Thus
book-keeping means recording, classifying and summarizing business transaction systematically so
that the businessman may be able to know his profit or Loss during a specified period.
www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-8505854213
2. 2. BOOK-KEEPING • It is the recording, on a day-today basis of the financial transactions and
information pertaining to a business. It is concerned with ensuring that records of those individual
financial transactions are accurate, up-to-date and comprehensive. Bookkeeping provides the
information from which accounts are prepared but is a distinct process, preliminary to accounting. Each
transaction, whether it is a question of purchase or sale, or change of loans, has to be recorded in the
books. www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-8505854213
3. 3. BOOKKEEPING INVOLVES: • Billing for goods sold or services provided to clients. • Recording
receipts from customers. • Verifying and recording invoices from suppliers. • Paying suppliers. •
Processing employees' pay and the related governmental reports. • Monitoring individual accounts
receivable. • Recording depreciation and other adjusting entries. • Providing financial reports.
4. 4. WHY BOOKKEEPING? • To keep receipts or other acceptable records of every payment to and
every expenditure from our business. • To summarize our income and expenditure records on some
periodic basis (generally daily, weekly, or monthly). • To use our summaries to create financial reports
that will tell you specific information about our business, such as how much monthly profit you're
making or how much your business is worth at a specific point in time.
5. 5. EXAMPLE OF BOOK-KEEPING CYCLE www.facebook.com/jackysethia; Contact: +91-
9782297977; Whatsapp: +91-8505854213
6. 6. TYPES OF BOOKKEEPING SYSTEMS BOOKKEEPING SYSTEMS SINGLE ENTRY SYSTEM
www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-8505854213 DOUBLE
ENTRY SYSTEM
7. 7. SINGLE-ENTRY SYSTEM • A Single-entry Bookkeeping System is a method of bookkeeping
relying on a one sided accounting entry to maintain financial information. • Single-entry Bookkeeping
System is commonly used for small businesses with very little or minimal transactions. It is often
referred to as simple, practical and informal way of recording. Usually, it only maintains a record of
cash disbursement, cash receipts, sales and purchases. All the rest of the accounting records, such as
inventory, equipment, capital, etc., are only recorded in the form of memorandum or notes.
8. 8. DOUBLE-ENTRY SYSTEM • 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. • Double-entry bookkeeping, in accounting, is a system of
bookkeeping so named because every entry to an account requires a corresponding and opposite entry
to a different account. www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-
8505854213
9. 9. METHODS OF BOOKKEEPING BOOKKEEPING METHODS MANUAL BOOKKEPING
COMPUTERIZED BOOKKEEPING www.facebook.com/jackysethia; Contact: +91-9782297977;
Whatsapp: +91-8505854213
10. 10. MANUAL BOOKKEEPING • Manual bookkeeping is the paper-based and traditional way of
bookkeeping. Business transactions are recorded manually by hand using manual or paper book of
accounts, such as journals books, ledger books and worksheets. • This method of bookkeeping is still
widely used especially by small businesses with less complex transactions. Many opt to manual
bookkeeping because it is cheaper and easier to maintain. However, the recording process is more
tedious than computerized bookkeeping. www.facebook.com/jackysethia; Contact: +91-9782297977;
Whatsapp: +91-8505854213
11. 11. COMPUTERIZED BOOKKEEPING • Computerized bookkeeping is the new and innovative way
of recording business transactions. With the use of accounting and bookkeeping software, the
bookkeeping process has been made easier, faster and more convenient. • Keep in mind that principles
and concepts of traditional bookkeeping process are still implemented and followed in computerized
bookkeeping. It only eliminated the tedious tasks involved in manual bookkeeping, thus, it made
recording and reporting of business transaction a lot faster and easier. www.facebook.com/jackysethia;
Contact: +91-9782297977; Whatsapp: +91-8505854213
12. 12. ELEMENTS OF BOOK-KEEPING • BOOKS • LEDGERS • TRIAL BALANCE
13. 13. BOOKS INCLUDES: • • • • • • • • JOURNAL CASH BOOK PURCHASES BOOK SALES BOOK
PURCHASE RETURNS BOOK SALES RETURNS BOOK BILLS RECEIVABLES BOOK BILLS
PAYABLES BOOK www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-
8505854213
14. 14. JOURNAL • When a small business makes a financial transaction, they make a journal entry in
their accounting journal in order to record that transaction. The transaction is recorded in the general
journal or one of the special journals for the most active accounts • Journal entries are an integral part
of the accounting process for a small business. Without them, you have no cohesive record of your day-
to-day financial transaction. You can't follow the money. You can't satisfy the tax authorities. You won't
know your cash flow or profit. Daily journal entries are some of the most important financial records
you have. www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-8505854213
15. 15. CASH BOOK • A financial journal that contains all cash receipts and payments, including bank
deposits and withdrawals. Entries in the cash book are then posted into the general ledger. The cash
book is periodically reconciled with the bank statements as an internal method of auditing.
16. 16. PURCHASES BOOK The Purchase Day Book records all the invoices it receives under the
following headings: – date – supplier – purchase ledger folio (reference to the page number of the
purchase ledger, in a manual system) – total amount invoiced – purchases – analysis of purchases (e.g.
telephone, electricity, etc….) – The invoice number is not recorded because this is a record of other
people’s invoices, which will have all different numbers. www.facebook.com/jackysethia; Contact:
+91-9782297977; Whatsapp: +91-8505854213
17. 17. SALES BOOK • This is the book of prime entry for credit sales, where all credit sales of the day
are listed and totaled. The total is then used as a single posting entry to the sales ledger and also posted
to a sales control account in a single total to tally with the underlying sales ledger. However, individual
debits are posted separately in the respective sales ledger (or debtors or receivables ledger accounts).
18. 18. PURCHASE RETURNS BOOK • This records goods which the business sends back to its
suppliers. The business might also receive cash refunds. In the meantime, a debit note might be issued
to the supplier. Headings for the purchases returns book would be: • date • supplier • goods • purchase
ledger folio • amount www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-
8505854213
19. 19. SALES RETURNS BOOK When goods are returned, for whatever reason, this is recorded in the
sales returns book. It’s headings might be: – date – customer – goods returned – sales ledger folio –
amount www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-8505854213
20. 20. BILLS RECEIVABLES BOOK • Definition and Explanation: Bills payable book is used to record
bill accepted by us. When a bill drawn by our creditor is accepted particulars of the same are recorded
in this book. • Posting: In the ledger, the account of each person whose bill has been accepted is debited
with the amount of the bill. The monthly total of the bills accepted is credited to the bills payable
account ledger. www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-
8505854213
21. 21. BILLS PAYABLES BOOK • Definition and Explanation: Bills receivable book is used to record the
bills received from debtors. When a bill is received, details of it are recorded in the bills receivable
book. • Posting: In the ledger the account of the person from whom each bill is received is credited
with the amount of that bill and the periodical total of the book is posted to the debit of bills receivable
account. www.facebook.com/jackysethia; Contact: +91-9782297977; Whatsapp: +91-8505854213
22. 22. LEDGERS The book, which contains accounts, is known as the ledger also called the Principal
Book. Ledger provides necessary information regarding various accounts. Personal accounts in ledger
show how much money firm owes to the creditors and the amount it can recover from its debtors. The
real accounts show the value of properties and also the value of stock. Nominal accounts reflect the
sources of income and also the amount spent on various items. The financial position of the business
concern can be ascertained easily at any time with the help of ledger. www.facebook.com/jackysethia;
23. 23. TRIAL BALANCE After posting the accounts in the ledger, a Statement is prepared to show
separately the debit and credit balances such a statement is known as Trial Balance. There are mainly
two methods of preparing Trial Balance : 1. The Totals Method – in this method the totals of each side
of the account is entered in Dr. and Cr. Column of the Trial Balance 2. The Balance Method – in this
method only the Dr. or Cr. Balances are entered in two columns. www.facebook.com/jackysethia;
24. 24. BOOK-KEEPING VS ACCOUNTING www.facebook.com/jackysethia; Contact: +91-
9782297977; Whatsapp: +91-8505854213
25. 25. BOOK-KEEPING IS A PART OF ACCOUNTING www.facebook.com/jackysethia; Contact: +91-
9782297977; Whatsapp: +91-8505854213
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PURCHASES BOOK The Purchase Day Book records all the invoices it receives under the following
headings: – date – supplier ...
SALES BOOK • This is the book of prime entry for credit sales, where all credit sales of the day are listed
and totaled. T...
PURCHASE RETURNS BOOK • This records goods which the business sends back to its suppliers. The
business might also receive...
SALES RETURNS BOOK When goods are returned, for whatever reason, this is recorded in the sales
returns book. It’s headings...
BILLS RECEIVABLES BOOK • Definition and Explanation: Bills payable book is used to record bill
accepted by us. When a bill...
BILLS PAYABLES BOOK • Definition and Explanation: Bills receivable book is used to record the bills
received from debtors....
LEDGERS The book, which contains accounts, is known as the ledger also called the Principal Book.
Ledger provides necessar...
TRIAL BALANCE After posting the accounts in the ledger, a Statement is prepared to show separately the
debit and credit ba...
BOOK-KEEPING VS ACCOUNTING www.facebook.com/jackysethia; Contact: +91-9782297977;
Whatsapp: +91-8505854213
BOOK-KEEPING IS A PART OF ACCOUNTING www.facebook.com/jackysethia; Contact: +91-
9782297977; Whatsapp: +91-8505854213
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05/01/2021 Book-keeping

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Published on Feb 8, 2014

Book-keeping and accounting cycle.

Share your thoughts…

Login to see the comments

Usha Rani , CSR Cordinator LEAF Society at Hospital Authority

Conversion from single entry to double entry(03)

20100712160725 chapter 2 double entry system

07 Single Entry System of Accounting

single entry system of book keeping

Double entry system

Income tax slab___tds-overview F.Y. 2013-14

Companies act, 2013

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Name* Best of Slides

headings: – date – supplier ...

and totaled. T...

business might also receive...

returns book. It’s headings...

accepted by us. When a bill...

received from debtors....

Ledger provides necessar...

debit and credit ba...

BOOK-KEEPING VS ACCOUNTING www.facebook.com/jackysethia; Contact: +91-9782297977;

BOOK-KEEPING IS A PART OF ACCOUNTING www.facebook.com/jackysethia; Contact: +91-

9782297977; Whatsapp: +91-8505854213

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