Bookkeeping
Bookkeeping
Bookkeeping (pronunciation: /ˈbʊkˌkiːpɪŋ/) is the process of recording, storing, and retrieving financial transactions for a business, nonprofit organization, individual, etc.
Etymology
The term "bookkeeping" comes from the practice of keeping physical books of financial records. The term "book" comes from the Old English "boc", which means "book", and "keeping" is derived from the Old English "ceeping", which means "care, custody, guard".
Definition
Bookkeeping involves the systematic recording and organising of financial transactions in a company. Starting and maintaining solid, professional accounting practices is essential for the growth of a business.
Importance
Bookkeeping is important because it allows a company to track all information on its books to make key operating, investing, and financing decisions.
Related Terms
- Accounting: The process of summarizing, analyzing, and reporting these transactions to oversight agencies and tax collection entities.
- Financial statement: A formal record of the financial activities and position of a business, person, or other entity.
- Balance sheet: A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time.
- Income statement: A financial statement that shows how much money a company made and spent over a period of time.
- Cash flow statement: A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.
- Double-entry bookkeeping system: A system of bookkeeping where every entry to an account requires a corresponding and opposite entry to a different account.
External links
- Medical encyclopedia article on Bookkeeping
- Wikipedia's article - Bookkeeping
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