Bookkeeping is the process of recording of financial transactions, and is part of accounting in business. Such transactions include any of and all purchases, sales, receipts and payments by or to an individual or organization. Anyone who handles this process is referred to as “Bookkeeper”. The accountant then uses the information from the financial transactions recorded by the bookkeeper to create reports such as balance sheets and files forms with government agencies (Now you see why this is fundamental of Accounting Basics!). As such there are many ways of bookkeeping, after all it is about recording the financial transactions but single-entry bookkeeping system and the double-entry bookkeeping system more common methods of bookkeeping.
There are generally 5 steps in the bookkeeping process:
In our next article we will discuss the bookkeeping entry systems and explore the terms we have encountered in this article in greater detail.
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