Bookkeeping is mainly concerned with the recording of financial data relating to business operations in a significant and orderly manner. It involves the process of recording, analyzing and interpreting the financial transactions.
Bookkeeping is the branch of Accounting which guides us how to keep a record of financial transaction. Such record are not only critical for the business or individual but also required by the law. It is a bookkeeper’s duty that financial statements setup correctly so that an accountant / taxman can easily perform further legal and tax related tasks on time. It is an art and science of correctly recording business transactions in a systematic and chronological order.
Definitions of Bookkeeping
Bookkeeping has been defined by many authors in many different ways. Let’s look at some of the popular definitions:
By J. R. Batliboi : “It may be defined as the science as well as the art of recording business transactions under appropriate accounts”
By R. N. Carter : ” It is the science and art of recording correctly in books of accounts all those business transactions that result in the transfer of money or money’s worth.”
By L. C. Copper : “Bookkeeping may be described as the science of recording transactions in money or money’s worth in such a manner that, at any subsequent date, their nature and effect may be clearly understood and that, when required a combined statement of their results may be prepared.”
The need for maintaining a record of Income and Expenditure in a systematic manner has given birth to the subject of bookkeeping.
For an example – Bookkeeping starts when a transaction of goods purchased identified and further includes entry booking in the books of accounts, Sales and Inventory registers management, a creditor’s liability until it’s paid.