Book Keeping methods

Book-Keeping is the art of keeping accounts in a regular and systematic manner. It is a systematic record of evets of a business unit big or small or of an individual. Book-Keeping and Accountancy practically mean the same thing although the term Accountacy is usually used for accounting work of a high order. The object of Book-Keeping and Accounting is to present a clear financial picture about the state of affairs of the business which are mainly expressed through two statements.

One statement summarises the income and expenses for the particular period and shows the profit earned or loss suffered by the business unit during that period. The other statement sets out what the business unit possesses and how much the business unit owes to others. The first statement is called as profit and loss account and the second one is known as the balance sheet.

There are two systems of book-keeping one known as the "Single Entry System" and the other is known as the "Double Entry book keeping". Single entry Book-Keeping is not actually a system. When accounts are not entered in a scientific way, or in an incomplete manner, it is termed as "Single Entry Book Keeping".

Double Entry book-keeping is the scientific method of recording busiess events or transactions. It is purely a scientific method. Sir Issac Newton has given three laws of motion. According to the Law of Motion, for every action there is an equal and opposite reaction. Based on this scientific principle double entry book-keeping is developed.

In every transaction there are two aspects. One aspect is the opposite of the other. Both the aspects are recorded. The two entries are called double entry and this method of book-keeping is called Double entry book-keeping.

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Book Keeping methods

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