In principle, each financial transaction is accompanied by a counter entry. It is natural of humans to forget, as such, should certain transactions be queried during an audit exercise, these documents provide clear evidence, nature and the purpose of the transactions in question. Besides, given the fact that prepared accounts are subject to independent audit, these documents provide an audit trail for every transaction. The primary reason for recording transaction supporting documents is not only to serve as an evidence of the transaction, but also to provide for transparency in the management of funds in an organization. Other common documents that support transactions include cash receipts, bank statements, journals, and supplier invoices. The supporting material describes the nature and purpose of the business transaction.Īs an example of a sale, for instance, it must be supported by a sales invoice and a sales receipt. Each transaction must, however, be accompanied by a supporting document, basically, evidence, justification, or explanation for the transaction. Principally, each transaction must be recorded in the books of accounts on a daily basis, as and when they occur. A bookkeeper, therefore, must ensure financial transactions are timely recorded with utmost accuracy to minimize errors during the financial reporting which can adversely affect the materiality of the accounts.īookkeeping is principled in supporting documents. It is from these records that final accounts are prepared.

The recording of these financial transactions forms the basis of accounting.

Processing staff salaries, determining and recording depreciation of organization’s assets, and preparation of financial reports also form part of the bookkeeping.

Verifying and recording supplier invoices.

Recording and monitoring accounts payable and receivables,.

Some of the financial transactions captured in the bookkeeping process include: It is an accounting process where financial transactions are recorded, analyzed and interpreted to tell the financial performance and position of an organization as at a particular date. Bookkeeping is the practice is a systematic recording, organizing and reporting financial transactions in an organization.

Ifinance bookkeeping