This document discusses the importance of bookkeeping for businesses. It defines accounting and bookkeeping, noting that bookkeeping involves systematically recording financial transactions and is a key part of accounting. Maintaining proper bookkeeping provides answers to important business questions about resources, liabilities, equity, revenues and expenses. It enables balanced budgeting and financial planning. The components of a good bookkeeping system include source documents, books of original entry, general ledgers, financial statements and subsidiary ledgers. Sample books, ledgers and financial statements are presented to illustrate a bookkeeping system. Overall, the document emphasizes that a proper accounting system is essential for business success through profit maximization and loss minimization.

1. Importance of
Bookkeeping in
Your Business
Presented by:
Efferson P. Ramirez
Senior Auditor

2. Introduction to Accounting and
Bookkeeping
Traditionally, Accounting is
defined as the art of recording,
classifying and summarizing in a
significant manner and in terms
of money, transactions and
events which in part at least of a
financial character and
interpreting the results thereof.

3. Basic Definition of Accounting
As to Function:
Accounting is a service
activity. It provides quantitative
information primarily financial
in nature, about economic
entities that is intended to be
useful in making economic
decision.

4. Basic Definition of Accounting
As to Purpose:
Accounting is the process
of identifying, measuring and
communicating economic
information to permit
informed judgment and
decision by users of
information.

5. Accounting versus Bookkeeping
Bookkeeping can be
considered as a
procedural/mechanical/
technical element of
accounting. It is the
systematic and
chronological recording
of transactions and
events. Development
and maintenance of
record are also its
concern.

6. Importance of Bookkeeping
Bookkeeping
will provide ???
present
answers to
basic questions
in your small
business such
as:

7. Importance of Bookkeeping
Evaluate
whether
your
resources
are
increasing,

8. Importance of Bookkeeping
Or are
you
incurring
liabilities?

9. Importance of Bookkeeping
Are you
improving your
Equity Standing?
It is the residual
interest of the
owner/s in the
assets of the
entity after
deducting its total
liabilities.

10. Importance of Bookkeeping
Are you
earning at
least fair
revenues?

11. Importance of Bookkeeping
Or you are
paying too CAS
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OU C
much
H ER
P ay
ee :
JHA
MM
ING
expenses?
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s
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12. Importance of Bookkeeping
Bookkeeping
will provide ????
answers to
basic
questions in
your business
evaluation and
planning:

13. Importance of Bookkeeping
• Where are you now?
• Where do you need to be?

14. Importance of Bookkeeping
So a well maintained
bookkeeping system will
enable you for balanced
Budgeting or Financial Planning
as a means of working to
quantify your Vision, Mission,
Goals and Objectives

15. So Proper Bookkeeping will provide you correct:
OBJECTIVES AND STRATEGIES

16. Without Proper Bookkeeping you will become:

17. PRACTICING
CORRECT
BOOKKEEPING
WHICH IS THE KEY
TO FINANCIAL
PLANNING SHALL
LEAD YOU TO
CORRECT PATH
TOWARDS SUCCESS
IF PAIRED WITH
REGULAR REVIEW
PROCESSES.

18. What are the components of a good
bookkeeping system?
2.Source Documents such as Official
Receipts, Cash Vouchers and Others
3.Books of Accounts such as Cash
Receipt Book, Cash Disbursement
Book, General Journal, General
Ledgers and Others
4.Subsidiary Ledgers andSchedules
5.Financial Statements as End
products.

19. THE GENERAL ACCOUNTING SYSTEM
Cash Receipts Cash disbursements Non-Cash Transactions Credit
Transactions
Cash/Check Purchase Invoice
Official Journal Vouchers
Source Documents Disbursement & Sales Invoice
Receipt (JV)
Vouchers (CDV)
Cash Other
Cash Receipt
Disbursement General Journal (GJ) Journals (PJ,
Books of Original Journal (CRJ)
Journal (CDJ) SJ)
Entry
Book of Final Entry General Ledger
Subsidiary
Financial Ledgers
Statements

20. SAMPLE CASH RECEIPT BOOK
DATE PARTICULARS REF CASH IN SERVICE
(DR.) REVENUE (CR.)

21. SAMPLE CASH DISBURSEMENT BOOK
DAT PARTICULARS RE CASH TRANSPORTATIO RENT SUPPLIES
E F OUT N (DR.) (DR.) (DR.)
(CR.)

22. SAMPLE
FINANCIAL
STATEMENTS

23. Mary's Massage Service
Balance Sheet
As of January 31, 2011
ASSETS
CURRENT ASSETS
Cash 12,000.00
Accounts Receivable 5,000.00
Supplies 2,000.00
TOTAL CURRENT ASSETS 19,000.00
NON-CURRENT ASSETS
Office Equipment 12,000.00
Building Improvement 20,000.00
TOTAL NON-CURRENT ASSETS 32,000.00
TOTAL ASSETS 51,000.00
LIABILITIES AND CAPITAL
LIABILITIES
Accounts Payable 12,000.00
Unearned Revenues 3,000.00
TOTAL LIABILITIES 15,000.00
CAPITAL
Mary Smith, Capital 36,000.00
TOTAL LIABILITIES AND 51,000.00
CAPITAL

24. Mary's Massage Service
Income Statement
For the Month Ended January 31, 2011
REVENUES
Service Revenue 36,100.00
LESS EXPENSES
Salaries Expense 3,000.00
Transportation Expense 500.00
Supplies Expense 3,000.00
Rent Expense 2,500.00
Utilities Expense 300.00
Telephone Expense 200.00
Advertising Expense 100.00
Total Expenses 9,600.00
NET INCOME 26,500.00

25. So…..
A proper accounting or bookkeeping
system is essential to any business
whether big or small in order to
manage its daily functions and keep
the business running successfully. For
any successful business, the main
obligation is to maximize profits,
minimize any loss and at the same
time maintain its position as a
responsible person or entity within the
society. Let us hear from you if we
could be of help in your bookkeeping
needs!

26. THANKS & GOD BLESS!!!