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Systems Used In Bookkeeping Services As a business owner, being able to have knowledge of different kinds of bookkeeping systems will help you to decide what kind of system will be more appropriate for your business transactions. Well the truth is, there are 2 kinds of bookkeeping systems that are being used nowadays and these include Double Entry Bookkeeping systems and Single Entry Bookkeeping systems. When it comes to single entry bookkeeping system, this is perfect for businesses under small scale category. This kind of system is used for maintaining record of business transactions that’s related to cash receipt, cash disbursements, sales and purchases. Actually, this system is more of an informal system applicable to small business transactions. The bookkeeper here is typically using this system to be able to maintain the day to day summary of cash payments and receipts and at the same time, the monthly summary of cash payments and receipts. Every single transaction affects just one account in a single entry bookkeeping procedure. As for double entry transaction however, each transaction will receive an entry for both accounts.
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The cash deposit or receipt account only be updated with received amount if there’s a sale for certain item. In a single entry bookkeeping system, the corresponding entry in the sales account will not be created. 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 regards to double entry bookkeeping system, this is a kind of bookkeeping system that is mostly used by accountants or bookkeepers in a business. This system is mostly used to complete the accounting details of transactions that are made by the business and at the same time, to introduce the concept of credit and debit. 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. Likewise, bookkeepers may have to make several 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. Manual bookkeeping and the other is computerized bookkeeping are basically the two methods of how bookkeeping is done. In manual, it’s actually the oldest method of bookkeeping to which the bookkeeper use a journal or ledger book to record different accounting entries that are related to business transactions. In computerized on the other hand, it’s like manual processes but computerized.