bookkeeping one

Bookkeeping I



bookkeeping system process
analyze record (4) summary
transaction other organization
to organize individual because
provide order (3) accurate
picture (2) finance financial
position profit loss
gain place take place
close (2) related accounting
prepare main/mainly deal (2)
carry out design install
perform audit interpret
statement tax tax return
operate (2) through easy/easier/easiest
basic type (2) hard/harder/hardest
asset liability equity
income revenue expenditure
resource usually own
cash inventory supply
land building equipment
separate keep (2) claim
credit debt creditor
owe include accounts payable
pay wage mortgage
general (2) consist claim
contribute capital contributed capital
retain earn retained earnings
expenditure nominal nominal accounts
considered part



Bookkeeping is the systematic process of recording, analysing, and summarizing the economic transactions of a business or other organization over a given period.

Organizations and individuals use bookkeeping because it provides orderly and accurate information about their financial transactions. It gives a picture of the financial position, and records the changes in profit, or loss making, which are taking place.

Bookkeeping and Accounting

Bookkeeping is closely related to accounting. Information prepared by a bookkeeper is used by an accountant to prepare accounts.

Bookkeeping mainly deals with recording and analysing financial information.


Accountants may carry out this work, but they also design and install information systems, perform audits, interpret financial statements, and prepare tax returns.

Systems of accounts, which may operate through a computer, are designed by accountants to make bookkeeping easier.


Bookkeepers record all economic transactions in accounts. The three basic types of accounts are asset accounts, liability accounts, and equity accounts. There are also income (or revenue) accounts and expenditure accounts.


Assets are the resources used by an organization. An organization usually owns its assets, which include cash, inventory, supplies, land, buildings, and equipment. Separate accounts are kept for the various types of assets.


Liabilities are claims of creditors such as debts owed by an organization. They include accounts payable, wages payable, and mortgages payable, and are generally recorded on separate liability accounts.


Equity consists of the claims of owners. Such claims include contributed capital and retained earnings. Income and expenditure accounts are sometimes called nominal accounts. They are considered part of the equity of the organization.

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1. What are the processes of bookkeeping? The processes of bookkeeping are….

2. Why do businesses and organizations need bookkeeping? Businesses need bookkeeping because…

3. Are bookkeeping and accounting the same? How are accounting and bookkeeping similar? How do they differ? How are they different?

4. What is an account?

5. Name the three basic types of accounts.

6. Only organizations have assets. True or false?

7. What does “payable” mean?

8. Define the following terms. Give examples of their meaning.
a) equity
b) contributed capital
c) retained earnings
d) nominal accounts
A. Are you  a bookkeeper or do you know someone who is a bookkeeper?

B. Do you deal with bookkeepers?

C. How can someone become a bookkeeper?

D. What is the demand for bookkeeping services?

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