Bookkeeping and Accounting – Calculation and Recording of Financial Dealings

The jobs of the bookkeeper and the accountant are intertwined in that the bookkeeper records financial transactions from which the accountant’s reports are based. Bookkeeping covers balancing financial ledgers, whereas accounting involves preparing a balance sheet and income statement from the bookkeeper’s trial balance results.

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Bookkeeping and Accounting - General Overview

Professionals commonly involved in bookkeeping and accounting at large companies are accounts payable clerks, accounts receivable clerks, accounting clerks and payroll clerks. The tasks can be done electronically by clerks or manually by traditional bookkeepers. Both kinds perform double entry bookkeeping, which requires at least one debited and one credited account for each business transaction. Another system for bookkeeping and accounting is the single-entry system, which entails recording income and expense accounts in a revenue and expense journal such as a cash book. Bookkeepers use daybooks for daily financial transactions, a petty cash book that contains small value purchase notes, a journal that details income and costs in a more formal and chronological manner, and a ledger, which collectively lists accounts with their individual beginning/ending balance.

Home Bookkeeping - Things to Consider

Many self-employed bookkeepers prefer to do their work at home because home bookkeeping requires less startup capital and allows them to work on their preferred hours. The entrepreneurs may franchise their business or build it from the ground up if they have experience in professional bookkeeping as well as the necessary accreditation. A home bookkeeping business can gain and maintain clients by joining a local chamber of commerce or promoting its services online. In addition to a ten-key calculator, computer programs on accounting can also aid a work-from-home bookkeeper. Quicken or Peachtree are good bookkeeping software, while QuattroPro and Microsoft Excel are the most commonly used spreadsheets.

Manual Bookkeeping - Practice

Manual bookkeeping takes longer than the electronic technique because of the collation of figures and other necessary financial data. This kind of bookkeeping makes use of a cash-in book, a cash-out journal and a general journal for miscellaneous data that do not fall under debits and credits. Manual bookkeeping follows more steps than electronic bookkeeping, beginning with the recording of entries in journals. These journals are balanced at the end of every month, and their totals are posted in general ledgers. The general ledger accounts should yield a trial balance of zero, otherwise the ledger is deemed out of balance. The account totals are then recorded in a balance sheet and a profit and loss statement.