ACC 101- Principles of Accounting

1.0 INTRODUCTION Bookkeeping is a concept, typically defined as the systematic recording of the facts that show the position of a business. Every business organization maintains financial records through bookkeeping. This common accounting procedure normally is performed toward the end of the work day or work week. Book keeping involves recording all expenses and payments received. The time spent in performing this procedure varies according to the size of the organization. Meanwhile, a bookkeeper is a person who has an in-depth knowledge of the maintenance of such records and is trained in operations such as preparing the bills, cheques, drafts and the like. In this unit, we shall discuss some basic concepts and guidelines engaged in bookkeeping.

2.0 OBJECTIVES After studying this unit, you should be able to: · Identify the basic parts of bookkeeping; and · Describe the key rules and guidelines required in an organization that encourage bookkeeping.

3.0 MAIN CONTENT 3.1 THE BASICS Bookkeeping is the preliminary part of accounting. It provides the reasonable bases for making financial reporting possible. Hence, bookkeeping starts from recording financial information from source documents into necessary books of account to extracting of the trial balance. In other words, the ledger and trial balance is the climax of bookkeeping. This provides the base from which the accountant extracts financial data for presentation of financial statement. 8 There are two main methods of bookkeeping, namely; single-entry bookkeeping and double-entry book-keeping. A single entry bookkeeping is a method of bookkeeping that relies on one sided accounting entry to maintain financial information. A double entry bookkeeping is a method of bookkeeping that relies on two sided accounting entry to maintain financial information. In whichever form it is maintained, bookkeeping plays a very significant role in an organisation. The bookkeeping section records income and liabilities of the organisation. An efficiently managed bookkeeping system in an organisation helps in determining the status of a series of key information, such as the exact cash position, the bank balance estimates, payments overdue etc.