Meaning Of Bookkeeping
Bookkeeping is the name used to describe the recording of cash and credit transactions so that information relating to the transactions may be easily obtained. Or Bookkeeping can be defined as the activity of recording business transactions in a given order, so that the records will show the exact situation of the business at any time.
IMPORTANCE OF BOOKKEEPING TO BUSINESS
Bookkeeping generally touches every life, everyone, a trader, a housewife, a student may be faced with the problem of balancing their expenses with their income. This is to enable them to live within their means and keep records of financial transactions.
Bookkeeping is also important for managers of large business organizations because from bookkeeping a businessman can find out the
- Value of goods purchased;
- Value of goods sold;
- Expenses of the business;
- The amount of cash in the office or in the bank;
- Sums of money owed by customers;
- Sums of money owed by the business to those it buys and borrows from ;
- Recorded value of the property and other possession of the business
- Profit or loss made in a particular trading period and
- The financial position of the business at any given day.
EVALUATION
- Define
- List five (5) importance of bookkeeping to a businessman
ESSENTIAL QUALITIES OF A BOOKKEEPER
A business has the ultimate purpose of making profit, providing goods, services and employing people. Accurate record is essential to smooth running of a business customers may be annoyed by any mistake and may decide to do business with another company. A bookkeeper, therefore should
- Be careful and accurate,
- Write legibly and
- Be able to operate any equipment under his or her control
COMMON BOOKKEEPING PRACTICES
- The Naira and kobo signs are not indicated in a ruled column; It is usually written on top
- Two zeros are written in the kobo column when an amount is in Naira only. If the kobo column is left blank there might be some doubt as to whether the recording of the kobo was forgotten.
- When an accountant rules a single line beneath an amount it indicates that either a total or a remainder will follow.
- A double ruling across an amount column indicates that work above the double lines is complete and accurate
- For neat accounting work, a ruler is needed for rulings.
| Date | Particulars | Amount
N : K |
| Jan 1 | Office supplies | 25,000.00 |
| 20 | Office equipment | 43,800 .00 |
| 68,800.00 |
GENERAL EVALUATION QUESTIONS
- List three common bookkeeping practices you know
- State three (3) essential qualities of a bookkeeper.
- Define Bookkeeping.
- State six (6) importance of bookkeeping to a businessman.
- Why is the number of people in the bookkeeping occupation expected to increase?
WEEKEND ASSIGNMENT – SECTION A
- _______ is the name used to describe the recording of cash and credit transactions
- Records B. Bookkeeping C. Bookkeeper D. Accountant
- These are the essential qualities of a bookkeeper except A. ability to discuss all businessfinancial secretswith anybody B. being careful and accurate C. Writing legibly D. being able to operate any equipment under his or her control.
- From bookkeeping a businessman can find out the following exceptA. value of goods purchased value of goods sold C. expenses of the business D. amount of tax to be paid
- A credit transaction is one that A. involves cheque is made with cash C. is made without immediatepayment D. is made with a close friend
- A cash transaction is one that involves payment with cash or chequeB. Involves payment with cheque C. Involves payment with cheque only D. involves paying at a future date
Section B
- List eight (8) items of information a manager of a large business can get from bookkeeping records.
- State three (3) essential qualities of a bookkeeper.
See also
MONITORING AND CONTROL OF CHEMICALS