Bookkeeping

Bookkeeping is the systematic recording and organizing of an organization’s financial transactions. It creates the records used to prepare financial statements and monitor cash, obligations, and performance.

Double-entry bookkeeping: A bookkeeping system that records each transaction with equal debit and credit entries across accounts. Its paired entries keep the accounting equation balanced as transactions are recorded.
Source document: A document or electronic record that provides evidence of a business transaction. Invoices, receipts, and similar evidence support the entries made in the books.
Accounts payable: Amounts a business owes suppliers for goods or services already received. Recording these obligations helps schedule payments and track outstanding bills.
Accounting: The broader process of measuring, interpreting, and communicating financial information. Bookkeeping records transactions; accounting also analyzes and reports their effects.
Financial audit: An independent examination of financial statements and supporting evidence to express an audit opinion. Auditors test whether bookkeeping records support reported balances and transactions.
Chart of accounts: An organized list of the accounts used to classify an entity’s financial transactions. It provides the categories into which bookkeeping entries are posted.
Accounting equation: The relationship stating that assets equal liabilities plus equity. Double-entry records are structured to preserve this relationship.
Accounts receivable: Amounts customers owe a business for goods or services provided on credit. Tracking receivables shows which customer payments remain outstanding.
Single-entry bookkeeping: A recordkeeping method that tracks transactions through one-sided entries rather than paired debits and credits. It offers a simpler alternative but provides fewer built-in checks than double-entry bookkeeping.
Fraud: Intentional deception for unlawful or improper gain. Incomplete or manipulated records can conceal fraudulent transactions.

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InvoiceNarrower topic: Invoices provide source documents for recording sales, purchases, and tax amounts.