Bookkeeping

Bookkeeping (Definition)

Bookkeeping is the systematic recording, organizing, and tracking of financial transactions in a business. It forms the foundation of the accounting process and is crucial for maintaining accurate financial records.

Key aspects of bookkeeping include:

1. Recording all financial transactions, including sales, purchases, receipts, and payments
2. Maintaining the general ledger, which contains all of a companys accounts
3. Preparing basic financial statements, such as income statements and balance sheets
4. Reconciling bank statements with internal financial records
5. Managing accounts payable and accounts receivable
6. Ensuring compliance with relevant accounting standards and tax regulations
7. Providing financial information to management for decision-making purposes

Effective bookkeeping is essential for understanding a companys financial position, ensuring tax compliance, and making informed business decisions.