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As an owner of a just lately started enterprise venture, knowledge on the completely different types of bookkeeping systems will be able that will help you in deciding the type of bookkeeping system that you would select for your business transactions. You possibly can also get information related to the totally different methods of book keeping being adopted globally. There are literally two types of book keeping systems namely Single Entry Bookkeeping systems and Double Entry Bookkeeping systems.

Single entry bookkeeping systems. If the type of Enterprise that you’ve got just started falls under the small scale class, single entry book keeping system could be very useful. This type of system maintains a report of the enterprise transactions associated to money disbursement, money receipt, purchases and sales. This type of system is more of an informal system suitable for small enterprise transactions. The bookkeeper will normally use this system to maintain a daily summary of the money receipts and cash payments and also a month-to-month abstract of the money receipts and payments. In a single entry book keeping procedure, each transaction will have an effect on only one account. In the case of a double entry transaction, every transaction would have an entry on both the accounts.

If there’s a sale of a particular item, the money receipt or money deposit account only be up to date with the quantity received. The corresponding entry in a sales account will not be made in single entry bookkeeping system.

Therefore it would not provide the entire financial standing of the varied systems in the business. If you want a detailed accounting of the different systems involved in business transactions, you would opt for a double entry system.

Double entry bookkeeping system. This is the type of system that is most commonly utilized by the bookkeeper or an accountant in any business organization. This system is used by the bookkeeper to keep full accounting particulars of the enterprise transactions. This system additionally introduces the idea of debit and credit. As there are a lot of accounting systems in a enterprise, a debit entry in one of many accounting system will usually be accompanied by a credit entry in one other accounting system or in more than one accounting system. Similarly, a bookkeeper might be required to make more than one debit entry for a single credit entry. The monetary performance of an organization will be clearly ascertained based on the accounting details obtained from the double entry accounting systems.

Basically, there are two methods of book keeping. One is the manual technique of bookkeeping and the other is the computerised method of bookkeeping.

Manual bookkeeping is the oldest form of bookkeeping where in the bookkeeper will be using a journal book or a ledger book to document the completely different accounting entries associated to the business transactions. Small enterprise owners still desire guide method of bookkeeping as it is economical and is suitable for sustaining less complicated enterprise transactions.

Computerised bookkeeping helps the bookkeeper to perform bookkeeping of complicated enterprise transactions in a much easier and faster manner. An accounting software system is normally used to do the accounting entries. The advantage this system has over the manual bookkeeping system is within the ease of producing reports and performing calculations. Complicated calculations might be performed accurately and quickly.

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