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Book Keeping is the systematic recording of the daily financial transactions of an organization so that the financial position of a business can be readily ascertained or determined at any time.Accounting is the act of recording, classifying, analyzing, summarizing, interpreting and communicating financial information of an organisation to various end-users of such information.
TransactionThe transaction involves the transfer of goods, services, money or money’s worth (e.g. assets) to and from a business organization.
Books of accounts are the books that are used in recording financial transactions in accounting.The books of accounts in use are: The Ledger – The Principal book The Journal – The Subsidiary book
Rules of Double Entry All transactions must be recorded in two accounts, one account is debited and another account is credited. For every debit entry in an account, there must be a corresponding credit entry in another account. For every credit entry in an account, there must be a corresponding debit entry in another account.
At the end of the month (or year or at some other convenient intervals), it is usual to balance the ledger accounts that are kept by the business. The balance of each ledger account is the difference between the two sides of the account and it represents the amount which is left in that account.The steps necessary to balance a ledger account are summarized as follows: Using a calculator, add up each side of the account and find the difference between the total of the two sides. Enter this difference on the next available line on the side with the smaller total. Enter the date (usually the last day of
Source documents are the instruments that are generated when businesses enter into business transactions with others.They are the written evidence of business transactions that describe the essential facts of those transactions. They are used in preparing the books of account.Every business transaction whether cash transaction or credit transaction must be supported (or evidenced) by a source document. The source documents are the original documents on which information about the transactions is recorded.
Subsidiary books are the books of prime entry (or books of original entry) into which transactions are first recorded in detail before they are posted in totals into the Ledger.

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