![]() This is single-entry bookkeeping in practice.įor a professional, bookkeeping gets more interesting because it is not at a personal level anymore. Nowadays, applications like Mint allow you to track your income and expenses much more efficiently. And we tally our income and keep tabs on our savings. Moreover, we all have a record of our payslips. Or sometimes simply to keep track of our expenses. Hence, we save receipts for our records in the event that we may wish to return the item purchased. Often, we are also bookkeepers with our shopping. ![]() ![]() Whereas double-entry bookkeeping follows the principles of debits and credits. Single-entry bookkeeping simply involves you recording incomes and expenses. The single-entry bookkeeping system is the simpler version followed by the double-entry bookkeeping system. Types of Bookkeepingīookkeeping is done via two major mechanisms. Later, these transactional records allow management to decide how well the business is doing and to determine areas for improvement. So, it is imperative for any company to keep a detailed record of all its transactions. For example, sales, purchases, petty expenses etc. Figure 1: The Focus Areas of AccountingĪ business goes through countless transactions daily. If you are someone who likes sifting through raw data and rendering it into meaningful metrics, bookkeeping is the perfect role for you. It is only through bookkeeping that data goes on to be processed for various accounting purposes. As a bookkeeper, you deal with huge sets of financial information that need to be segregated into useful chunks. In his book Sapiens, Yuval Noah Harari explains that the earliest written record ever discovered is a clay tablet from Mesopotamia signed by Kushim, a bookkeeper!īeing one of the four main focus areas of accounting, bookkeeping is about collecting, recording, and organizing financial data. And it is a practice dating back centuries. As the name suggests, it is about keeping records. The very first step to becoming an accountant is the knowledge and practice of bookkeeping.
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