The meaning of bookkeeping is often found within the term itself. This implies keeping the records of business transactions within the original books of accounts of the business. Bookkeeping is mainly concerned with identifying the transactions of financial nature, recording them, and maintaining their systematic record in the books.
According to L.C. Cropper, “Bookkeeping is that the science of recording transactions in money or money’s worth in such a fashion that, at any subsequent day, the character and effect of each transaction and the combined effect of the transactions could also be clearly understood in order that the accounts prepared at any time from the records, thus, kept may show the owner of the books his true financial position.”
In the words of Northcott, “BookKeeping is that the art of recording within the books of accounts the monetary aspect of economic and financial transactions.”
J.R. Batliboi states Book Keeping as “an art of recording dealings during a set of books.”
From the above explanation, it is often derived that BookKeeping may be a function of:
- Identifying the transactions and events of monetary character
- Measuring them in terms of money
- Recording them within the books of accounts and
- Classifying the transactions so recorded into Ledger Accounts.
Thus, bookkeeping helps in keeping the entire and comprehensive record of all the business transactions in an organized manner. It is a small part of accounting but it is very important as it forms the basis for accounting.
Accounting is that the secondary stage, whereas, bookkeeping is that the primary stage. To perform the function of bookkeeping, one need not have specialized and expert knowledge of accounts. This function is often performed by the clerical or junior staff of the business.
Finished reading, Meaning of BookKeeping?
Accounting Definition – Accounting is the science of recording and classifying business transactions and events, primarily of a financial character, and therefore the art of creating significant summaries,