Notes za Book keeping Form two 2 for O level based in current syllabus of Book Keeping. Book-Keeping for Secondary Schools TIE notes. Bookkeeping involves the recording, on a regular basis, of a company’s financial transactions.
Concept of book-keeping
What is book-keeping ?
Book-keeping is the arts of recording business transaction in term of money or money worth.
Book-keeping is the branch of accounting which deals with recording of data or events.
Or
Book-keeping deals with analysis classification and recording of business transactions in the books of accounts. ?
What are the objectives/ importance of studying book- keeping?
The following are the objectives /importance of book-keeping
- Business control-a business owner will have to maintain proper accounting records of all business assets and liabilities this help in decision making.eg deciding matter like business expansion according to business profit
- Knowledge of credit dealing– most business transactions are conducted on credit basis therefore the business owner have to maintain accounting records in order to know the amount due from debtors and those owing to his creditors.
- Determination of profit -the main aim of business is to make profit.Complete and proper business records assist in ascertaining the profit.
- Reliable financial position- it is very common for business firm to seek financial assistance from financial institution such as bank. For business to receive such assistance the credit worthiness of a business must be known.the proper analytical business records must be maintained as this influence the determination of selling price of business.
- Fair tax assessment
Normally tax Authority requires submission of proper final accounts for fair income tax charge.
What are the differences between bookkeeping and accounting?
- Book-keeping is part of account which deals with recordswhile accounts accounting deals with identifying measuring and communicating economic information to permit informed judgments and decisions making by the users of the information.
- Bookkeeping is mainly concerned with daily records of business transactions while Accounting deals use daily records for decisions making
- The nature of book keeper work is clerical while accountants are responsible for preparation of financial reports and statements as well as the analysis and interpretation of the reports.
- Bookkeeper are supervised by accountants while accountant supervise the bookkeeper
Common terms used in bookkeeping
Business is any economic activities that aim at profit making.
Profit the excess of business revenue over the business expenses
Assets these are resources owned by the business. Business resources like land, buildings, machine furniture and motor vehicle are called non-current assets because they last in business for more than one year .assets like stock of goods debtors cash at bank and cash in hand are called current assets because they may last in business for less than one year
Capital / owners’ equity–is the total resources supplied to the business by its owner.
TOPICS
CHAPTER ONE: RECORDING CASH TRANSACTIONS.
CHAPTER TWO: BANK RECORDS AND PERSONAL RECORDS AND RECONCILIATION.
CHAPTER THREE: CORRECTION OF BOOK-KEEPING ERRORS.
CHAPTER FOUR: CONCEPTS IN PUBLIC SECTOR BUDGETING AND ACCOUNTING