The Impresionante- Book keeping- 31 Isha Aggarwal A, 92 Nitish Bagla B, 156 Richa Jain C

Bookkeeping:

Introduction to Bookkeeping

Before computers were in common use, bookkeeping was done by an actual bookkeeper. This person kept a company's day-to-day financial records by manually recording every business transaction into a journal. The journal entry included the date, the name of the accounts to be debited and credited, and the amounts. All journal amounts were rewritten in (or "posted" to) the company's general ledger and subsidiary ledger accounts. An internal document called a trial balance was designed to give that proof. If the trial balance did not balance, the bookkeeper had to go back, transaction by transaction, to find and correct the cause of any disparity.

With the arrival of computers and accounting software, bookkeeping errors decreased and efficiency increased. With the development of commerce BOOK KEEPING has attained a position of great importance and today the whole fabric of modern commerce rests on bookkeeping.

Discussion

Definition of Bookkeeping:

Bookkeeping may be defined as the art of recording business transactions in books in a regular and systematic manner.

Objects of bookkeeping

1. It must provide a permanent and systematic record of all business transaction

2. The periodical results as to profit or loss should be readily and accurately ascertainable.

3. To enable financial data to be supplied for management of the business

4. The entries and narrations should clearly show the nature and effect of each transaction and the combined result of all taken together

Double Entry System of Bookkeeping:

The double entry system of bookkeeping owes its origin to an Italian merchant named Lucas Pacioli. Whether bookkeeping tasks are performed manually or electronically, one thing remains the same: every business transaction involves at least two accounts. This is known as double entry bookkeeping. Double entry bookkeeping requires that for each transaction, one (or more) account must be debited, and one (or more) account must be credited.

Debits on the Left, Credits on the Right

Every account has two "sides," a right side and a left side. A debit refers to an entry on the left side of an account, and a credit refers to an entry on the right side of an account.

• A debit will increase these accounts:
• Assets
• Expenses
• Losses
• Drawing account

• A debit will decrease these accounts:
• Liabilities
• Stockholders' Equity

• A credit will increase these accounts:
• Liabilities
• Revenues
• Gains

• A credit will decrease these accounts:
• Assets

Conclusion

§ Success is directly linked with book keeping. If we know how to create a product, or providing services, or marketing but don’t know how to manage money efficiently it will ruin the reputation of company. So, Bookkeeping is an important tool based on your business records.

§ Sometimes small businesses often neglect it because of the time and effort to manage a bookkeeping system. But now with the help of computer bookkeeping software, applications make it easy to track income and expenses, prepare tax documents, summarize your company's financial activities and back up records for safekeeping. And it even economize time and efforts.

§ Book keeping if mastered, is the simplest and easily accessible thing to record day to day transactions leading to know how and where the fund are being utilized.

References

http://accountingformanagement.com

Books consulted:

1. Elements of Book Keeping- Class XI

by Juneja and Chawla

2. Double Entry Book Keeping – Class XII

By T.S. Grewal

The Introduction part has been completed by Nitish Bagla, Roll No. 92, Section B, the Discussion part by Isha Aggarwal, Roll No. 31, Section A and the final conclusion has been given by Richa Jain, Roll No. 156, Section C. However, the whole assignment is the result of the combined efforts of all the group members.

Thankyou.