The process of recording a company's financial transactions on an organized account is known as Bookkeeping. Bookkeeping also suggests different recording business techniques that users can use. Bookkeeping is playing important role in user of accounting for a few reasons. When users keep their transaction records updated, Users can generate financial reports that help users to find their business performance. I'm going to share different methods of Bookkeeping.
Bookkeeping Methods
Before involving in Bookkeeping, the user have to decide which method of Bookkeeping user will use according to his business. In order to decide the method, Users have to make sure about the volume of daily transactions of their business and the amount of revenue the user earned. Complex bookkeeping methods designed for enterprises may cause unnecessary complications.
Single-entry Bookkeeping
Single-entry bookkeeping is a method, In this method, One entry is made for each transaction in the user's books. These transactions are maintained in the cash book to track revenue and also expenses. Users do not have to get trained for the single-entry books. The single-entry method is made for small businesses that hold a small amount of inventory.
Double-entry Bookkeeping
Double-entry Bookkeeping is more strong than Single-entry Bookkeeping. It follows the method that every transaction affects two accounts and they are recorded debits and credits. Double-entry method is best, If Users have business is large, public, or buys and sells on credits.
Cash-based bookKeeping
It's time to choose the method for cash-based bookkeeping. This will depend on when the user's business recognizes its revenue and expense. In cash-based, Users will recognize when revenue and cash are in the user's business.
Accrual-based BookKeeping
In the Accrual-based method, Users will be recognized when they earned. Users do not have to add or exit cash for the transaction to be recorded. Users can mark their sales and purchases. Accrual-based works on Single-based or double-based bookkeeping.
How to record entries in Bookkeeping
Financial statements like balance sheets and cash flow statements help users to understand the ups and downs of their business and they can gauge its performance. To get these reports to portray their business accurately, Users have to properly record their transactions.
Recording transactions start with source documents like purchase and sales orders, and cash register taps. Once you have these documents, Users can record the transactions using journals and the trail balance. If users have a very small business company, users may only need a cash register. Then the information is turned into financial statements.
Cash Registers
An electronic machine that is used to calculate and register transactions is known as Cash Registers. Cash Register is used to record incoming and outgoing cash in stores. The cashier collects the cash in the register as single-entry cash accounts.
Cash registers are found in all most all businesses. This is not a primary method of recording transactions because they use single-entry cash-based systems of bookkeeping. This method is too simplistic for the enterprise but it is convenient for small businesses.