The Single and Double Entry Bookkeeping System
Bookkeeping is easily defined as the act of accounting for the financial activities which persons, offices, or organizations actively participate in. Basically, the premise of bookkeeping is to keep track of the financial activities which people or organizations, in an effort to ideally control the expenditures which persons or organizations or businesses incur, as well as to have hard records of where money in question goes, as well as how much money comes in.
This is actually quite helpful and beneficial, as a bookkeeping system is sure to keep tabs on what happens with the money held by a private individual or by an organization.
In bookkeeping, there is the Single Entry and the Double Entry Bookkeeping System, as well as the Single Account Bookkeeping system.
Single Account Bookkeeping System
When talking about the Single Account Bookkeeping System, it stands to be the most suited for personal or family interests, involving the recording of income, recording of expenses and assessing the balance difference. It is quite simple actually, requiring the most basic of logic needed.
Single Entry Bookkeeping System
When talking about Single Entry Bookkeeping System, the primary bookkeeping record in Single Entry Bookkeeping is the Revenue and Expense Journal. These are similar to a checking account register, but differs as this allocates the income and expenses to different expense and income accounts. For petty cash records, accounts payables, accounts receivables and other relevant transactions, separate account records are maintained.
Double Entry Bookkeeping System
The Double Entry Bookkeeping System stands to be the basis on which bookkeeping standards are maintained by businesses and other organizations. The premise behind the Double Entry Bookkeeping System is that a business's financial state and the resulting effects of the monetary operations involved in its operation are best recorded in accounts. In the Double Entry Bookkeeping System each transaction is recorded in at least two accounts.
In the Double Entry Bookkeeping System, each transaction results with at least one account falling under as a debit, and another one at least credit, with the totals of debits in the transaction record equal to the total of credit records.
Bookkeepers benefit from this, but is something laymen don't exactly fully comprehend. The benefit which bookkeepers garner would be that of the accuracy of the accounts, which is something bookkeepers aim to maintain while on the job.
So, having just read about these three bookkeeping systems, Single Account, Single Entry and Double Entry Bookkeeping Systems, you now have a clearer grasp as to which bookkeeping system is for you.
