Do you know BOOK KEEPING can be done in how many ways ? Let's enhance our basic knowledge on book keeping

Primarily two types of bookkeeping systems exist:

(A) Single-Entry &

(B) Double-Entry

Single-entry bookkeeping: This method is simpler and suitable for small businesses with straightforward financial transactions. In single-entry bookkeeping, each financial transaction is recorded only once, typically in a revenue and expense journal. It tracks income and expenses but does not provide detailed information about assets, liabilities, and equity.

Double-entry bookkeeping: This is a more comprehensive and widely used method, especially for larger businesses. In double-entry bookkeeping, every financial transaction affects at least two accounts. For every debit entry, there must be a corresponding credit entry, ensuring that the accounting equation (assets = liabilities + equity) remains balanced. Double-entry bookkeeping provides a more accurate picture of a company's financial health and facilitates the preparation of financial statements like the balance sheet, income statement, and cash flow statement.

Many businesses worldwide use double-entry bookkeeping because of its accuracy and the insights it provides into the financial performance and position of the company. Additionally, adherence to double-entry bookkeeping standards is often required for regulatory compliance and financial reporting purposes.