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8 Book Keeping

Introduction

Book keeping is that branch of knowledge which tells us how to keep the record
of financial transactions. The process of recording the financial transactions day to
day in proper books of accounts is known as book-keeping. It includes the recording
of journal, posting in the ledgers and balancing of accounts. All the records before
the preparation of trial balance are the subject matter of book-keeping. Thus, book-
keeping may be defined as the art and science of recording transactions in money or
money’s worth so accurately and systematically in a certain set of books, that the true
state of businessman affairs can be correctly ascertained.

R.N. Carter– "Book-keeping is the science and art of correctly recording in the
book of account all those business transactions that result in the transfer of
money or money's worth."

J.R. Batliboi– "Book-keeping is the art of recording business transaction in a
set of books."

So we can say that, Book-keeping is a primary and basic function in the process
of accounting and is concerned with record keeping or maintenance of books of
accounting which is often routined and clerical in nature. It is the science of recording
transactions in money and money’s worth in such a manner that at any subsequent
date, their nature and effect may be clearly understood and as per the need a combined
statement of their result may be prepared.
Accounting

As we discussed above, book-keeping is the art of recording business transactions in
a systematic and scientific manner. The book of original records do not give an idea of
a company’s financial positions. When one has to make a judgment and take decision
regarding the financial position of a firm, the information contained in these books
has to be analyzed and interpreted.

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