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maintenance of systematic and convenient records of money transactions in order to show the condition of a business enterprise. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. Proper bookkeeping should also reveal the nature and value of the assets and liabilities of a firm, as well as its net worth at the close of that period.

Bookkeeping records are kept in columnar form, using separate columns for the date of transaction, an explanation of the nature of the transaction, and its value. Other columns may be added. In general, two sets of columns are used, assets being placed in one set of columns and liabilities in the other set (a money value having been assigned to all assets and all liabilities of the business). Such an arrangement is called double entry. A balance sheet may be compiled at any time by totaling each column and subtracting the smaller total from the greater to give either a surplus or a deficit. The result is called the net worth, and it gives an indication of the financial state of a firm. A detailed balance for a period between two balance sheets is called a profit and loss statement.

The process of deciding whether to enter items into one set of columns or the other, i.e., into the debit side or the credit side, is called journalizing, since the analyzed items are placed in a journal, or daybook, soon after the transactions occur. Separate accounts of persons or sections are kept in a book called a ledger; the ledger is now often a computer file (created in "spreadsheet" software) rather than a physical book. The transfer of items from the journal to the ledger is called posting. In large businesses, the journal is broken into many sections, each concerning a separate function of the business, such as sales, purchases, accounts receivable, accounts payable, sales return, purchases return, and cash on hand. The journal also has sections for invoices, inventory, orders, cash, sales, bills, and checks.

Single-entry bookkeeping enters all debits and credits in a single set of columns in a journal and labels each entry Dr. (debit) or Cr. (credit). Thus in a single entry only one element of a transaction is entered. Single-entry bookkeeping fails to give detailed information as to the sources of gain or loss.

There are two main methods of accounting for money in a business. The cash method reports income in the year it is received and deducts expenses in the year they are paid. The accrual method reports income when it is earned and deducts expenses as they are incurred, regardless of whether the money has actually entered or left the business yet.

Any bookkeeping system must also account for all canceled checks, paid bills, duplicate deposit slips from banks, and other records of transactions. These records act as proof of the posted entries; they are usually organized chronologically or by type and are kept in filing cabinets. Bookkeeping machines, ranging from the simple adding machine to the computercomputer,
device capable of performing a series of arithmetic or logical operations. A computer is distinguished from a calculating machine, such as an electronic calculator, by being able to store a computer program (so that it can repeat its operations and make logical
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, help in maintaining properly organized books. Computers revolutionized bookkeeping and accounting systems, both for entering ledger items and for such operations as year-end profit-and-loss calculations.

The Babylonians, Egyptians, Greeks, and Romans kept business records. Double entry seems to have been first developed by the people of N Italy during the great commercial expansion of the 14th and 15th cents. and has consequently been called the Italian method. The system then spread to the Netherlands, England, and elsewhere. Single entry developed later.

See also accountingaccounting,
classification, analysis, and interpretation of the financial, or bookkeeping, records of an enterprise. The professional who supplies such services is known as an accountant. Auditing is an important branch of accounting.
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; auditingauditing,
examination and statement of accounts and of other documents connected with accounts by persons who have had no part in their preparation. Systems of financial inspection have long been used, especially in connection with public accounts.
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References in periodicals archive ?
Pamela maintains affiliation with National Association of Enrolled Agents, American Institute of Professional Bookkeepers, and the Goldwing Road Riders Association.
It is also possible to work as a self-employed bookkeeper and choose times to suit you.
Once working as a bookkeeper it's likely you're employer may encourage you to undertake additional qualifications, such as the Level 4 Diploma in Business and Accounting.
Ms Carr said: "Becoming a Registered Bookkeeper is important as it demonstrates that I have the most up to date and relevant skills possible to provide the best service for my current and future clients.
The 37-year-old, from Newtownabbey, Co Antrim, who at the time of the alleged offence was the bookkeeper of the Newtownabbey Linfield Supporters Club, replied "not guilty" when the charge was put to him by the clerk of the court.
Prior to joining Pliskin, Waterbury served as the bookkeeper for Dynamic Corporate Holdings.
By writing checks to regular suppliers for non-existent invoices, then voiding them and writing checks to herself, the bookkeeper was able to embezzle a significant amount of money over a period of years.
TWO teenage apprentices have signed up to take the North East's first apprenticeship for bookkeepers.
There was a fitted cupboard in these offices and our bookkeeper said: "He's over there by the cupboard.
as the company's bookkeeper and his duties included general accounting and writing checks for the business.
At the date of publication of this research, there were another four cases of alleged bookkeeper fraud currently before the Australian courts.
Question: After the aforementioned termination, my bookkeeper prepared the ex-employee's final paycheck before the deadline.