Bookkeeping

Bookkeeping

What is Bookkeeping?

Bookkeeping involves systematically recording every financial transaction—such as sales, purchases, payments, and receipts—in a consistent and organized manner. These records are typically maintained in ledgers or digital accounting systems.

Key Components of Bookkeeping

• Transactions: All money coming in (income) and going out (expenses) must be recorded.
• Journals & Ledgers: Transactions are first recorded in journals and then posted to ledgers, which categorize financial data.
• Chart of Accounts: A structured list of all accounts used to classify financial transactions.
• Trial Balance: A summary to ensure that total debits equal total credits, confirming the books are balanced.