The Basics of Bookkeeping and Financial Transactions

The financial transactions on the books of a company are the result of professionals who understand and observe the basics of bookkeeping.

Basic Facts to Know About Bookkeeping

Bookkeeping is one of the most important aspects of any properly functioning organization. It forms the foundation on which a company’s financial transactions are reflected. Recording all financial activities such as cash received, items purchased, and vendors paid are essential to any company’s financial well-being. Knowing the certification level of a bookkeeper in Las Vegas is important because there are various levels.

Facts

The most basic activity in bookkeeping involves recording all daily financial transactions of an organization. This is the first step in keeping track of a company’s financial operations. Bookkeeping involves recording a company’s sales, income, purchases, and payment transactions. The main responsibility of a bookkeeper is to maintain accounting records of a firm. There are two main types of records used in bookkeeping: single entry and double entry.

Bookkeeping positions

Bookkeeping covers various areas. A full charge bookkeeper maintains a company’s entire bookkeeping records. A bookkeeping assistant helps the full charge bookkeeper with the work overload. Some bookkeepers specialize in accounts receivable. In addition to posting transactions, bookkeeping may entail collections and keeping customer accounts up to date. The main role an accounts payable bookkeeper is to maintain vendor accounts and handle communications with the vendors regarding payment arrangements. Payroll bookkeepers focus on receiving and maintaining organizations’ payroll data.

Documents

Certain documents are used in bookkeeping to accomplish various tasks efficiently. Daily transactions are usually recorded in the chart of accounts. A company’s transactions may be recorded in sales orders, purchase orders, and invoices. A general ledger is used to record transactions of each account to ease classification and organization. Once a general ledger has been coded, the transaction information recorded on the ledger are posted on journals including accounts receivables, sales, cash receipts, payroll and accounts payable among others. The general ledger provides a summary of the total of each journal. The final figures in the ledger are reflected in a trial balance.