Bookkeeping is the recording, on a day-to-day base, of the financial transactions and information pertaining to a business. It is that division of knowledge which tells us how to maintain a record of business transactions. It is frequently routine and clerical in nature. It is significant to reminder that only those transactions related to business which can be articulated in terms of money are recorded. The activities of book-keeping include recording in the journal, posting to the ledger and balancing of accounts. It is a separate procedure that occurs within the broader scope of accounting.
The objectives of book-keeping are
- to show permanent record of business
- to maintain records of income and expenses in such a method that the net profit or net loss may be calculated.
- to keep records of supplies the information of creditors and debtors of business.
- to maintain organize on expenses with a view to reduce the similar in order to exploit profit.
- to determine the amount of Tax liabilities
- to prevent errors and frauds