Bookkeeping definition and explantation for dummies

1. Bookkeeping

2. Bookkeeping is an activity or occupation of keeping records of the
financial affairs of a business.

3. A transaction is a purchase or deposit that a company makes in the
course of operating.
Transactions are the building blocks of bookkeeping.
Bank statements are the inputs, and the Financial Statements are the
outputs.
Note: Cash Transactions wont appear on a bank statement

4.  Assigning the proper bookkeeping account to a transaction.
or
 Classifying a transaction to appropriate bookkeeping account.

5.  Bookkeeping is done to generate financial reports. Financial Reports
can be generated after completing the bookkeeping process.
What do we do with these Financial statements?
 These Financial statements are used by a Certified Public Accountant
(CPA) to assemble tax returns.
This makes our service a necessity for those clients that do not
want to do their own bookkeeping.
Bookkeeping can be done for individual or/and for business.

6. Below listed are a few important reasons why people do
Bookkeeping and generate Financial Reports
 Preparing your income tax return
 Submitting sales taxes
 Distributing profits
 Obtaining Bank Financing
 Obtaining other sources of capital
 Budgeting
 Providing the information you need to make decisions

7. • To monitor the success or failure of our business.
• With a clear financial picture, we can easily know how our business is
doing
Like..
 Are we making money?
 Are sales increasing?
 Are expenses increasing faster than sales?
 Which expenses are too high based on my level of sales?
 Do some appear to be“out of control?”

8.  Intuit - Quickbooks Desktop/QBO
 ACS
 MYOB/Accountedge
 CSA
 Xero
 NetSuite
 Wave
 Freshbooks
 Quicken-Personal Finance
 Zoho

9. END