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Author: John Leslie
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Tags: double-entry diaries, single entry, general ledger, journal, the stage of equilibrium, paths, computing, accounting, bookkeeping, accounting, accounting, tax system
Bookkeeping or individuals. An accountant must ensure that all transactions are recorded in the Daybook correct, suppliers ledger, customer ledger and general ledger. Even if a bookkeeper is called an accounting clerk or an accounting technician, not to be confused with accounting bookkeeping. An accountant uses recordings from bookkeeper to create financial reports. Because the jobs are similar, several bookkeepers have the potential to become (or are) also accountants.
There are two systems common as bookkeepers use to record financial transactions. Small firms mainly use the single entry – system. This system uses only the Income and Expenditure, mainly recorded in income (money earned) and log expenditure. The system double entry is more complicated, and it ensures that the books are free of errors. This system does this by recording transactions in two different registers handling (both sides) records, and using a balance of debits and credits. Having the data stored in two different registers allows the accountant to recover from a mistake in one, looking the other … at least in theory.
Financial transactions are recorded in several different books. These, beginning with the Daybook, contains detailed documents. Sometimes, diaries are not kept, so everything is recorded in journals. The totals for each section (sales, purchases, loans, cash etc.) are recorded in the records. Ledgers also have different sections and are used to the balance sheet and income statement. Ledgers often include:
* Ledger customers for financial transactions with a client (sometimes called a record sales).
* Register of suppliers for transactions with a financial provider (sometimes called a purchase ledger).
* General (nominal) ledger assets representing, liabilities, income and expenditure.
When an accountant will audit the books for errors, they wear them at a trial balance. At this stage, they create a spreadsheet listing the balances of each ledger account, in two columns (debit and credit), to a certain date. Under the double entry system, debits a transaction must be equal to that credit. Balance is often used as a tool to search for errors. If the debits and credits were inconsistent not, then there is an error. Even if the difference between debits and credits is zero (debits-credits = 0), there are still errors. For example: if a transaction failed (error of omission), the totals will not be performed. A balance is a statement of the ledger.
Now, accounting can be done on the computer. This is called the computerized accounting. Computerized Accounting allows much of the paper "books" be eliminated, thus saving trees (but not electricity). The main advantage is however the largest speed with which accounting can be done.
Bookkeeping can be very time consuming. Therefore, business owners Most small businesses use an accounting service. Large firms also frequently hire a bookkeeper – or more. It is not necessary to visit an accountant if you have Internet, however. You can submit the online financial information to a bookkeeper in the comfort your own office!
So what are these books used? Aside from providing strategic information to the owner, the books of a company are used to allow an accountant to create financial reports and determine what companies must pay taxes. Its for you and government.
See also: http://en.wikipedia.org/wiki/Bookkeeping
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