Category: business and revenue generation

What is Bookkeeping? It is the art and process pertaining to the systematic recording, categorisation, classification and summarizing of business and financial events and transactions. All this is recorded in a set of documents.

Below are some common Bookkeeping terminology:

Ledger account - is the main accounting record of a business. It is the record of credits, debits and balances of each individual account. It is a summarized record of all of the transactions that has occur.

The accounts are usually grouped into the following catergories:

Assets
Liabilities
Revenues
Expenses
Owner's equities
Gains
Losses

Balance sheet - a statement of the book value of all of the liabilities and assets of a business at a particular date.

Business transaction- the exchange of money or items of value between two or more party or persons.

Consistency is essential for good bookkeeping. As such regular updating is beneficial. The following are some common mistakes made by small businesses:

1. Lack of Backup

It is beneficial to back up the records. This is especially crucial if you are using a computer.

2. No proper dealing of employees.

Employees must be taken into account during the bookkeeping process.

Well, these are the basics of book keeping. Hope that it has been useful.