Looking On The Bright Side of Bookkeeping

What Systems And Methods Are Used In Bookkeeping Services? For any business owner out there, it is integral to have knowledge on different bookkeeping systems used to decide which system is more applicable for your business transactions. Well as a matter of fact, there are 2 kinds of bookkeeping systems used today namely as Double Entry Bookkeeping systems and Single Entry Bookkeeping systems. When it comes to single entry bookkeeping system, this is perfect for businesses under small scale category. This kind of system is used for maintaining record of business transactions that’s related to cash receipt, cash disbursements, sales and purchases. This system is actually more of informal system that is applicable to small business transactions. For this, what the bookkeeper does is to make use of the system in order to maintain day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. When it comes to single entry bookkeeping procedure, only one account is affected by every transaction made. In case of a double entry transaction on the other hand, every transaction would have entry on both accounts.
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Say for example that there is a sale for certain item, then the cash deposit or receipt account is updated only with received amount. Corresponding entry in sales account won’t be made in single entry bookkeeping system. As a result, it isn’t providing a thorough financial standing of various systems in the business. You should go for a double entry system only if you’re rooting to have a more detailed transaction of different systems involved in the business transaction.
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In regards to double entry bookkeeping system, this is a kind of bookkeeping system that is mostly used by accountants or bookkeepers in a business. This system is used to be able complete accounting details of transactions made by the business and also, introducing the concept of credit and debit. Mainly because of the reason that there are a number of accounting systems used in bigger businesses, debit entry is one of those accounting systems that’ll be accompanied by a credit entry but in different accounting system or perhaps, in more than one accounting system. And likewise, the bookkeepers should have different debit entries for one credit entry. The financial performance of the company may be ascertained clearly based on acquired accounting details from double entry bookkeeping systems. There are two methods on how bookkeeping is done one of which is manual bookkeeping and the other is computerized bookkeeping. In manual, it’s actually the oldest method of bookkeeping to which the bookkeeper use a journal or ledger book to record different accounting entries that are related to business transactions. In computerized on the other hand, it’s like manual processes but computerized.