What is Bookkeeping and Accounting?

Definition of Book Keeping and Accounting

It refers to a process of accurately recording of the business transactions as per the requirements of law. It involves the activity of keeping the books of accounts in proper order so that the entries in the books reflects and provides proper state of affairs of the business at any required point of time.

Types of bookkeeping

There can be singly entry and double entry system of Bookkeeping. The later is most popular which involves recording of the transactions for both the receipts and the payments in the same records. It is a way of recording the entries in a proper manner to ensure that the books reflect the actual status of the business

Meaning of Accounting

It is the activity of recording and keeping the financial details of the transactions. It is obligatory on every entity to keep record of the transactions in a proper. There are some basic principles of accounting that need to be followed while recording the transactions and basis this accounting, the financial statements such as Profit and loss account and the balance sheet of the entity is made.

There are primarily two types of transactions that are recorded here and they are the capital transactions and the revenue transactions based on their nature. All these transactions put together expresses the financial affairs of the entity. Companies with public money are required to get it audited and publish such accounting statements periodically.

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