Basic Bookkeeping involves keeping records of financial dealings that can
be maintained by using computerized system or can also be done manually
(this is not followed these days). Manual bookkeeping is achievable for
small businesses or even for beginners but computerized system for
bookkeeping will be advantageous for big and developed businesses. The
process of bookkeeping begins with recording the financial transactions
of business in primary-entry sales book, bank book, cash book, purchase
book, journal and debit notebook/credit notebook. These books are
considered as primary-entry books where business transactions are
recorded first and then these entries are transferred to ledger accounts.
The process of posting the transactions into ledger is known as ledger
posting. There are two columns on bookkeeping ledgers Dr. (Debit) and Cr.
(Credit). The debit column is present on the left side of bookkeeping
ledger and credit is on the right side.
The balancing of every ledger account is maintained at periodic time
intervals that can not be more than 1 year. Many associations do this on
month basis, quarterly or on the basis of six months. The trial balance
is a statement where the sum of debit side should be equal to the sum of
credit side which is made from the ledger balances. Trial balance is the
investigation of the accuracy of arithmetic recording, transactions
posting and total figures.
Tips for Basic Bookkeeping
The most ordinary errors that occur in basic bookkeeping can be easily
fixed by following the below mentioned bookkeeping tips.
Employ Accurate Accounting System – Most organizations either employ
accrual-based or cash-based accounting system. Under the cash-based
method, people need to count all the incomes when they receive and
expenses when they pay them. In case of accrual-based method, people need
to count all the expenses and incomes when happen not when they actually
pay or receive. In practical stipulations, this distinction in timing is
applicable if the organization maintains inventory or stock on hand or
maintains credit transactions. In these conditions, accrual-based
accounting system can be the accurate choice for any business to succeed.
Maintain Records on Regular Basis – It is one of the important and basic
rules for accurate bookkeeping. If people do not maintain records daily,
they will not be able to trail the financial condition of their company.
Review and Handle Checks Carefully – This is also important to analyze
the canceled checks prior to anyone else to avoid mistakes in bookkeeping
system. People need to take similar care with bank checks as with cash to
track any unauthorized payments.
Obtain the Bank Statement at Month End – This is one of the most
essential tips that can help one manage finances. Synchronizing the
monthly records with the bank statement will make simple to reconcile the
bank statement and follow the business expenses.
Make Use of Computer – People can make use of computerized bookkeeping
system to record the financial activities of the business as computerized
system makes it easier to track the expenses and incomes, maintain tax
documents and lots more.
In conclusion, these provisions and necessary adjustments make sure that
bookkeeping will be done with GAAP (Generally Accepted Accounting
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