BOOKKEEPING

-is the of recording history

-it is the physical recordkeeping of someone’s transactions as
they relate to ASSETS, LIABILITIES, INCOME and EXPENSES
 BOOKKEEPING
Is a process of ACCUMULATING,ORGANIZING, STORING,
and ACCESSING the financial information base of an
entity, which is needed for two basic reasons:
TWO BASIC PURPOSE
 A. facilitating the day- to-day operations of
the entity.
 B. preparing financial statements, tax

returns,and internal reports to the manager.

Keeping good records is very
important to your business.
 Good records will help you do the following:
 1. Monitor the progress of you business
 2. Prepare your financial statements
 3. Identify sources of your income
 4. Keep tract of your deductible expenses
 5. Keep tract of your basis in property
 6. Prepare your tax returns
 7. Support items reported on your tax returns
The following are some of the types
of records that should be kept:

 1. RECEIPTS
◦ - are the income you received from your business.
◦ You should keep supporting documents that show
the amounts and sources of your gross receipts
DOCUMENTS FOR GROSS RECEIPTS
INCLUDE THE FOLLOWING:
 Cash register tapes
 Deposit information (Cash and Credit sales)
 Receipts books
 Invoices
PURCHASES
 -are the items you buy and resell to
customers.
 If you are a manufacturer or producer, this

includes the cost of all raw materials or parts

purchased for manufacture into finished
products.
 Your supporting documents should show the

amount paid and that amount was for

purchases.
Documents for purchases include the
following:
 Cancelled checks or other documents that
identify payee, amount, and proof of
payments
 Cash register tapes
 Credit card receipts and statements
 Invoices
Expenses
 Are the cost you incur (other than purchases)
to carry on your business.
 Your supporting documents should show the

amount paid and a description that shows the

amount was for a business expense,
Documents for expenses includes the
following:
 Cancelled checks or other documents that
identify payee, amount, and proof of
payments
 Cash register tapes
 Credit card receipts and statements
 Invoices
 Petty cash slip for small payments
Travel, transportation, entertainment,
and gift expenses
 If you deduct travel, entertainment, gift