Different Types and Methods of Bookkeeping Systems

Bookkeeping is the recording of financial transactions and which is part of the process of accounting in business. There are several standard systems of bookkeeping which include,

  1. the single-entry bookkeeping system and the
  2. double-entry bookkeeping system,

While they may be referred as real bookkeeping to any process that involves the recording of financial transactions.

Therefore, bookkeeping is usually performed by a bookkeeper- who is a person who records the day-to-day financial transactions of a business. Bookkeeper is usually responsible for writing the daybooks which contain records of purchases, sales, receipts, and payments and he or she is responsible for ensuring that all transactions whether it is cash transaction or credit transaction are recorded in the correct daybook, supplier’s ledger, customer ledger, and general ledger. The bookkeeper also brings the books to the trial balance stage where an accountant may prepare the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.

There are different types of bookkeeping systems that range from maintaining records, auditing to preparing income tax returns such as the following;

  1. Financial accounting:

This accounting primary focus is towards accuracy of financial data towards external reports. Where accounting professionals with specialized in external reporting requires in depth knowledge on accounting framework like, International Financial Reporting Standards, Generally Accepted Accounting Principles or government standards of the country.

  1. Management accounting:

These are accounts that are maintained by companies only for internal purposes. It is in dept information about company rather than the information available to the public. Where this information is used by an organization to control and define strategic goals. Data may be used to structure budget planning, forecasts, organization goals.

  1. Cost accounting:

This account its main purpose is to control and monitor effective cost of production. Where these kind of accounting methods are mostly preferred by manufacturing companies for controlling and maintaining costs.

  1. Public accounting:

The primary objective of this account is to examine the financial statements and supporting documents of client companies and it assures that financial proclamations collected by customers genuinely exhibit financial position of an entity.

  1. Government accounting:

It is a kind of accounting system which manages funds uniquely. Governmental accounting maintains accounts for public sector companies.

  1. Forensic accounting:

These kinds of accounting techniques are followed for examining and investigating disputed or

Lawsuit cases. They play a role of witnesses in courts of law for financial criminal or financial disputes cases. These accounting also assess financial effect of loss or detection of financial fraud.

 

  1. Tax accounting:

It is represented by the assessment rules recommended by the countries tax laws. Tax accounting rules, standards and principles are different than financial statement prepared for public reviews.

There are several methods of bookkeeping which include the following;

  1. Manual method of bookkeeping.

This refers to the paper-based and a traditional method of bookkeeping. The business transactions are being done manually by the hands and or using paper for book of account, like ledger books, journal books and even worksheets.

  1. Computerized method of bookkeeping.

It is innovative method of making records on business transactions. However, most of the business ventures still prefer to use a computerized method because of its reliability, efficiency and convenience. For more info: http://www.bookkeeperco.com.au

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