Get To Understand More Concerning Book Keeping.
It is important to record all these transactions and account for the use or management of any resources concerned with the business company. The recording of all these kinds of particulars would help to account for the business financial status and how the finance of the business is managed.
The business will need to know where to invest or improve on in order to grow financially and also maybe increase the sales and keep the company growing economically. Book keeping is more beneficial for the small businesses and those that are growing at a rapid rate.Book keeping is a complicated process that requires a professional to do the work.
Book keeping ensures that the data of the business is kept safe and secured. This is done manually by the accountants and therefore it could be more accurate.
The process of book keeping is not always done by any other person but it is always a requirement that a person has the skills of book keeping and has the experience. He or she is responsible for recording the day books which contains the purchases and sales of the business that takes place per day.
Book keeping is majorly the part of the accounting concepts since the accountant will always want the records in order to make the financial statement of position and also the balance sheet.
It records the financial effects that are felt in the transactions of any kind within the business. For instance, when there are any sales of goods or services in the business, invoices must be produced to show that there were certain sales of a certain amount and the total cash acquired from the sales.
The book keeper should take the step of recording all the details of these source documents in a column journals. Some businesses would want to record the totals at the end of every month while others would do the totals at the end of every year.Once the summary have been done, the summaries are then transferred to the respective ledgers.
Only the accountant can do such changes in the book of accounts and for this reason the book keeper is not expected to do the changes unless instructed by the accountant. The income statement is also known as the profit and loss account or the statement of financial result of a given company.Another type of financial statement is the statement of financial position also known as the balance sheet.