Merger and Collision For Beginners – Bookkeeping Accounting

Bookkeeping Accounting

Bookkeeping is a procedure of maintaining records of financial transactions, which is a part of the method of accounting in most businesses and organization. It involves preparing income statement, balance sheet, sales statement, and statement of earnings, and inventory activity for a particular period. It includes keeping track of cash, assets, liabilities, and surplus or deficiency. These records are used by management to know the present status of the business, the performance of business activities, profit or loss, and also to forecast future course of action.

Bookkeeping can be broken down into three major sections: Financial accounting ledgers/ ledgers, Real estate ledgers/ books, and Managed care ledgers/ bookkeeping. With the advent of Information Technology, all the financial records can be generated online. The main advantage with online accounting is that it eliminates manual work and saves on valuable time. It helps in maintenance of accurate ledgers. This method helps in improving productivity and maintaining flawless records of financial activities.

bookkeeping

An individual, who is responsible for accounting and bookkeeping, should have knowledge of computer programs like spreadsheets, word processors, financial transaction software, Quickbooks, SQL, Oracle, Python, C, Java, RIS, and PHP. These programs help in performing accounting tasks like creating tax record, creating balance sheet, creating financial transaction reports, tracking inventory and sales by month, creating work orders, setting up client database for customer order processing, and others. A bookkeeper’s daily tasks include entering transaction details in ledgers, preparing reports for management, analyzing the data to identify problem areas, and closing financial transaction. To keep pace with fast-changing business, bookkeepers are required to upgrade their skills, knowledge, and expertise on regular basis.

Merger and Collision For Beginners – Bookkeeping Accounting

In order to keep track of large number of transactions and document the same, the use of accounting systems is essential. This is because bookkeepers are supposed to generate reports in daily basis, as per the business needs. For instance, in aviation sector, it is very vital to keep track of the flight logs and records so as to avoid accidents. To perform accounting functions accurately, professionals are required who are skilled with computer systems.

Today, several ledgers are used in different industries and businesses. These ledgers contain balance or cash flows, income and expenses, account details, and more. For example, the cash flow statement is used to show the movement of cash from the current assets to the future ones. Accounting ledgers not only help to improve the recording procedures, but also to make sure that there are no errors in recording due to misinterpretation of transactions or documentations.

All the records in the financial statement must be correct and updated. In order to attain accuracy, a bookkeeper’s reports are compared with the financial statements. If any discrepancy is found, corrections are made. The trial balance is an itemized list of all debits and credits.