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Completely different Types and Methods of Bookkeeping Systems

As an owner of a not too long ago started enterprise venture, knowledge on the totally different types of bookkeeping systems will be able that will help you in deciding the type of bookkeeping system that you can choose for your online business transactions. You would also get information related to the different methods of book keeping being adopted globally. There are literally types of book keeping systems namely Single Entry Bookkeeping systems and Double Entry Bookkeeping systems.

Single entry bookkeeping systems. If the type of Business that you’ve just started falls under the small scale category, single entry book keeping system could be very useful. This type of system maintains a document of the enterprise transactions associated to money disbursement, cash receipt, purchases and sales. This type of system is more of an informal system suitable for small enterprise transactions. The bookkeeper will usually use this system to take care of a every day summary of the money receipts and money payments and likewise a month-to-month abstract of the cash receipts and payments. In a single entry book keeping procedure, each transaction will affect only one account. Within the case of a double entry transaction, each transaction would have an entry on each the accounts.

If there is a sale of a particular item, the cash receipt or money deposit account only be up to date with the amount received. The corresponding entry in a sales account will not be made in single entry bookkeeping system.

Therefore it does not provide the entire monetary standing of the various systems within the business. If you’d like a detailed accounting of the totally different systems involved in enterprise transactions, you could possibly go for a double entry system.

Double entry bookkeeping system. This is the type of system that’s most commonly used by the bookkeeper or an accountant in any business organization. This system is utilized by the bookkeeper to keep full accounting particulars of the enterprise transactions. This system also introduces the idea of debit and credit. As there are a lot of accounting systems in a enterprise, a debit entry in one of the accounting system will usually be accompanied by a credit entry in another accounting system or in more than one accounting system. Equally, a bookkeeper is perhaps required to make more than one debit entry for a single credit entry. The financial performance of a company can be clearly ascertained based on the accounting particulars obtained from the double entry accounting systems.

Basically, there are methods of book keeping. One is the handbook methodology of bookkeeping and the other is the computerised method of bookkeeping.

Manual bookkeeping is the oldest form of bookkeeping the place in the bookkeeper will be using a journal book or a ledger book to file the totally different accounting entries related to the enterprise transactions. Small business owners still want manual method of bookkeeping as it is economical and is suitable for sustaining less advanced business transactions.

Computerised bookkeeping helps the bookkeeper to perform bookkeeping of complicated enterprise transactions in a much simpler and faster manner. An accounting software system is often used to do the accounting entries. The advantage this system has over the guide bookkeeping system is in the ease of producing reports and performing calculations. Advanced calculations may be performed accurately and quickly.

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