Bookkeeping or the so called “journals” is the recording of financial transactions. Transactions include (sales, purchases, income, and payments by organization or by an individual. Bookkeeping is usually performed by a bookkeeper. Bookkeeping should not be confused with accounting. The accounting process is usually performed by an accountant. The accountant or accounting one creates reports from the recorded financial transactions recorded by the bookkeeper. There are some common methods of bookkeeping such as the Single-entry bookkeeping system and the Double-entry bookkeeping system. While these systems or methods may be seen as “real” bookkeeping, any process that involves the recording of financial transactions is a bookkeeping process.
A bookkeeper (or bookkeeper) also known as an accounting clerk or accounting technician, is a person who records the day to day financial transactions of an organization. A bookkeeper is responsible for writing the daybooks. These daybooks consist of purchase, receipts, payments and sales. A daybook is a chronological record of day to day financial transactions also called a book of original entry. The daybook’s details must be entered formally into journals to enable posting to ledgers. Daybooks include:
Sales daybook used
for recording all the sales invoices.
Purchases daybook used for recording all the purchase invoices.
Sales credits daybook used for recording all the sales credit notes.
Cash daybook also known (as the cash book) used for recording all money received in, and payments daybook for money paid out.
Purchases credits daybook- used for recoding all the purchase credit notes.
The bookkeeper is responsible for ensuring all transactions are recorded in the correct daybook, general ledger, supplier ledger as well as customer ledger. He/she brings the books to the trial balance stage. An accountant may prepare the income statement and balance sheet using the trail balance and ledgers prepared by the bookkeeper.
There are two common bookkeeping systems used by businesses and other organizations: the single entry bookkeeping system- uses only expense and income accounts, recorded primarily in a revenue and expense journal. The other one is the double entry bookkeeping requires posting each transaction twice, using the credits and debits.
Bookkeeping and financials are likely twin sister.
