Robert McCarthy - Bookkeeping: An Essential Guide to Bookkeeping for Beginners along with Basic Accounting Principles

Bookkeeping

An Essential Guide to Bookkeeping for Beginners along with Basic Accounting Principles

Copyright 2020

The contents of this book may not be reproduced, duplicated, or transmitted without direct written permission from the author.

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Please note the information within this document is for educational and entertainment purposes only. Every attempt has been made to provide accurate, up to date, and reliable information. No warranties of any kind are expressed or implied. Readers acknowledge that the author is not engaging in the rendering of legal, financial, medical, or professional advice. The content of this book has been derived from various sources. Please consult a licensed professional before attempting any techniques outlined in this book.

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Introduction

B ookkeepers are the lifeblood of almost every business. If you believe that information is critical, you will agree that a bookkeeper has a crucial role in a company. The information recorded in books allows business owners to make essential decisions involving market strategy or product launches while handling several other financial aspects of their business simultaneously.

If it weren't for the ongoing efforts of bookkeepers, most businesses wouldn't know much of what was happening to their finances. With no precise financial knowledge, business executives would be merely guessing about the number of sales made, the cash drawings and withdrawals, or the cash that was paid out and the items sold to consumers during the year. It would be challenging to ascertain the amount paid out to employees or the amount spent on other business essentials.

Reliable and precise financial bookkeeping is essential to every business and is crucial to those who work within the company. Managers, owners, employees, and external teams like investors, lenders, and government agencies all rely heavily on the bookkeeper to record financial transactions accurately.

If you're an employee whose job is to keep the books for a small business owner, or you are a business owner who does the books yourself, your role is vital, and knowing the essentials of bookkeeping is paramount. Bookkeepers must be thorough, enjoy working with numbers, and be conscientious about inserting the numbers precisely into the records.

But here is another side of the coin: if you are new to bookkeeping, it might be challenging to navigate through these procedures. Well, here is the good news: this book walks you through all you need to know about bookkeeping.

What This Book Can Do for You

Bookkeeping is a continual process that starts with financial transactions. In this guide, we will cover:

• Documenting those transactions in journals
• Adding those transactions to a General Ledger
• Checking your books to ensure they are balanced
• Making appropriate changes or corrections where necessary
• Structuring financial reports to show how well the business is doing

Who This Book is For

If you picked up this book to get explicit knowledge of bookkeeping, I assume you are either:

A business owner who would love to learn how to do your books. Most likely, you may have good knowledge of the market and its jargon, but you little understanding of bookkeeping and accounting,

Someone who has already studied bookkeeping but is looking for a comprehensive 'refresher' or reference work,

A staff member in a small business who has just been asked to take over a businesss bookkeeping duties, and need to understand precisely how transactions are reported in the books, how to make sure that the entries are done correctly and accurately, and how to report financial information by using the data collected,

Someone who does bookkeeping or intends to do bookkeeping for small businesses and wants to learn more about how to set up and keep books. I assume you have a little knowledge of business terminology, but you don't know much about accounting or bookkeeping. Or, perhaps, finally,

Someone going through a job/role transition where bookkeeping and accounting are vital skills.

This book serves as a quick starter guide. Hence, if you are entirely new to the world of bookkeeping, this book is for you. So, what are you waiting for? How about we kick-start your bookkeeping journey!

Part One: Bookkeeping Basics

N ot sure of what bookkeeping is all about? In this part, discover...

Why bookkeeping is an important business feature.

How bookkeeping differs from accounting.

Manual and computerized bookkeeping basics, and

Some common bookkeeping software that can help you kick-start your bookkeeping journey.

Chapter One: Why Bookkeeping is Essential to Your Business

M ost small business owners employ accountants to work for them. And guess what? The cost is often too high for a small business, so the businessman employs a bookkeeper who functions as the ears and eyes of the organizations accountant. The accountant assists the bookkeeper in establishing sound bookkeeping habits, and regularly reviews his or her work. The truth is that every small business owner wants to reduce costs while increasing their revenue, and doing the books yourself can help minimize your business costs.

B ookkeeping relates to managing and maintaining financial records like ledgers, reports, financial statements, income tax records, and more. Bookkeeping, also called record-keeping, is the accounting component that documents receipts, expenses, and some other business activities in the accounting system. Bookkeeping serves to provide the material required when creating financial statements. In other words, bookkeeping is the process through which data is placed into an accounting system. This can be achieved either manually on a physical ledger or digitally through accounting software like QuickBooks. While the benefits of bookkeeping are vast, it is a job that is often boring, difficult, and despised by many.