INTRODUCTION TO

ACCOUNTING
BOOKKEEPING AND ACCOUNTING
WHAT IS BOOKKEEPING?
 Bookkeeping is the recording of financial
transactions in a systematic manner

 It is a part of the process of accounting

 It is usually performed by a book-keeper

 WHO IS A BOOKKEEPER?
 A bookkeeper is the person who records the
day to day financial transactions of a business

 He or She has responsibility for writing up the

various accounting books such as the sales
and purchases journals and ledgers

He has to ensure that all business

transactions are recorded and that they are
recorded in the correct books.
WHAT IS ACCOUNTING?
Accounting is the process of systematically
recording, measuring, analyzing and
communicating financial information so that
users can make more informed decisions.

It is a system of providing quantitative

information about a business or person’s
financial position.
IMPORTANCE OF ACCOUNTING
 Record
Organizations need to have a reliable and
systematic way of recording financial
information.

Accounting is necessary to ensure that those

running the business have a reliable record of
financial transactions.
IMPORTANCE OF ACCOUNTING
 Legal
 Accounting helps organizations to determine

their financial rights and obligations. Without

proper accounting, it would be very difficult for a
business to calculate, for example, the exact
amount owing to a supplier or the amount to be
paid in taxes to government.

 Maintaining accounting records and preparing

financial statements is also often a legal
responsibility for businesses above a certain size.
IMPORTANCE OF ACCOUNTING
 Performance
 Accounting information is summarized to
produce financial statements which provide an
overview of the financial activities of a business
during a period as well as information about
its financial position on a specific date.

 Financial Statements help owners in assessing

the performance and position of their business
which can guide their investment decisions. 
IMPORTANCE OF ACCOUNTING
 Planning and Control
 Accounting helps organizations to plan their

finances by developing budgets and

forecasts.
 
 This process helps organizations in planning

their finances ahead and controlling any

deviations from the budget.
IMPORTANCE OF ACCOUNTING
 Decisions
 Accounting provides a basis for decisions

internal and external users.

NEXT CLASS
 USERS OF FINANCIAL INFORMATION AND
THEIR NEEDS.
ANY QUESTIONS?