Completely different Types and Methods of Bookkeeping Systems

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As an owner of a recently started enterprise venture, knowledge on the different types of bookkeeping systems will likely be able that can assist you in deciding the type of bookkeeping system that you may select for your enterprise transactions. You may additionally get info related to the different methods of book keeping being adopted globally. There are literally types of book keeping systems namely Single Entry Bookkeeping systems and Double Entry Bookkeeping systems.

Single entry bookkeeping systems. If the type of Enterprise that you’ve just started falls under the small scale category, single entry book keeping system could be very useful. This type of system maintains a report of the enterprise transactions related to cash disbursement, money receipt, purchases and sales. This type of system is more of a casual system suitable for small business transactions. The bookkeeper will normally use this system to maintain a daily summary of the cash receipts and money payments and also a monthly summary of the money receipts and payments. In a single entry book keeping procedure, each transaction will affect only one account. Within the case of a double entry transaction, every transaction would have an entry on each the accounts.

If there is a sale of a particular item, the cash receipt or cash deposit account only be updated with the amount received. The corresponding entry in a sales account will not be made in single entry bookkeeping system.

Therefore it does not provide the entire financial standing of the varied systems within the business. If you would like a detailed accounting of the completely different systems involved in business transactions, you may opt for a double entry system.

Double entry bookkeeping system. This is the type of system that is most commonly utilized by the bookkeeper or an accountant in any enterprise organization. This system is utilized by the bookkeeper to keep full accounting details of the business transactions. This system also introduces the concept of debit and credit. As there are numerous accounting systems in a business, a debit entry in one of many accounting system will often be accompanied by a credit entry in another accounting system or in more than one accounting system. Equally, a bookkeeper could be required to make more than one debit entry for a single credit entry. The monetary efficiency of an organization could be clearly ascertained primarily based on the accounting particulars obtained from the double entry accounting systems.

Basically, there are two strategies of book keeping. One is the guide methodology of bookkeeping and the opposite is the computerised technique of bookkeeping.

Manual bookkeeping is the oldest type of bookkeeping where within the bookkeeper will likely be utilizing a journal book or a ledger book to document the totally different accounting entries associated to the enterprise transactions. Small enterprise owners still desire handbook technique of bookkeeping as it is economical and is suitable for sustaining less complicated enterprise transactions.

Computerised bookkeeping helps the bookkeeper to carry out bookkeeping of complicated business transactions in a a lot simpler and faster manner. An accounting software system is often used to do the accounting entries. The advantage this system has over the guide bookkeeping system is within the ease of generating reports and performing calculations. Complex calculations can be carried out accurately and quickly.

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