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What Systems And Methods Are Used In Bookkeeping Services? For any business owner out there, it is integral to have knowledge on different bookkeeping systems used to decide which system is more applicable for your business transactions. There are 2 kinds of bookkeeping systems used today as a matter of fact and these are Double Entry Bookkeeping systems and Single Entry Bookkeeping systems. For businesses that fall under the small scale category, then it will be ideal to use a single entry bookkeeping system. This system is used to maintain record of business transactions related to cash receipt, cash disbursements, sales and purchases. This system is actually more of informal system that is applicable to small business transactions. For this, what the bookkeeper does is to make use of the system in order to maintain day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. In single entry bookkeeping procedure, every single transaction affects just one account. As for double entry transaction however, each transaction will receive an entry for both accounts.
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Say for example that there is a sale for certain item, then the cash deposit or receipt account is updated only with received amount. Corresponding entry in sales account won’t be made in single entry bookkeeping system. As a result, it isn’t providing a thorough financial standing of various systems in the business. You should go for a double entry system only if you’re rooting to have a more detailed transaction of different systems involved in the business transaction.
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In double entry bookkeeping system, this is a bookkeeping system that is used typically by accountant or bookkeeper in any business. The system is used in an effort to complete accounting details of the transactions made by the business and to introduce concept of credit and debit at the same time. Mainly because of the reason that there are a number of accounting systems used in bigger businesses, debit entry is one of those accounting systems that’ll be accompanied by a credit entry but in different accounting system or perhaps, in more than one accounting system. And likewise, the bookkeepers should have different debit entries for one credit entry. The company’s financial performance can be ascertained clearly based on accounting details acquired from double entry bookkeeping systems. There are 2 ways to do bookkeeping one of which is manual bookkeeping and the other is computerized bookkeeping. Manual as what the name suggests is the oldest method of bookkeeping in which the bookkeeper uses a journal or ledger book in recording different accounting entries that are related to business transactions. On the other hand, computerized bookkeeping does the same thing in manual processes only here, it’s computerized.