Monday, 12 April 2010

A graphic Overview of Bookkeeping

The graphic at the bottom of this post seeks to provide a quick glance into book-keeping procedures and debit/credit rules, as well as the broad classification of accounts.
In narrative terms, the graphic can be translated as:
  • Business transactions create records which can be processed in the traditional manner by making entries in day books, ledgers and preparing trial balance and financial statements. If accounting has been computerized, the record details are entered into the system through data entry screens and the details are then sorted in different ways by the accounting application and printed in desired formats to produce different types of reports, including the final financial statements
  • Accounts are broadly classified into Income, Expense, Asset, Liability and Equity accounts, and the entries under Debit Credit columns against each type shows what happens when that type of account receives a debit entry or a credit entry
With this post, we have finished with accounting routines. We will now look at more advanced topics. If you are interested in basic accounting, here is a low cost book for you:

The Accounting Game, 2E: Basic Accounting Fresh from the Lemonade Stand [Paperback] A reviewer says the following about the book: "Fantastic Learning Tool...Don't let this book title fool you. It is not an oversimplification of accounting and financial principles. It is, however, a serious and very effective examination of a very small but progressively complex business. There are not many books available on the market that make a complex and dry subject understandable and even fun. This book successfully does just that."

1 comment:

  1. It is best to leave the detailed work of book keeping to a professional and many business owners rely upon an outside book keeping service.

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