Professional Documents
Culture Documents
What is Book-keeping ?
Book-keeping simply means
recording of transactions. In
absence of transaction, the
question of book-keeping does not
arise at all. So, transactions are
the basic raw materials of book-
keeping .
Some definitions of book-keeping:
"Book-keeping is the art of recording business
dealings in a set of books."
- J.R.BATLIBOI
"Book-keeping is the science of recording
transactions in money or money's worth in such a
manner that at any subsequent date, the nature
and effect of each transaction and the combined
effect of all the transactions may be clearly
understood, and so that the accounts thus kept
may show the owner of the books the true final
position."
- L.C.Cropper
Thus ,book-keeping teaches us the correct
process of keeping records of business
transactions.
What is Accounting ?
CONVENTIONAL METHOD :
Personal Account :
Receiver of Value - Dr.
Giver of Value - Cr.
Real Account :
Value coming in - Dr.
Value going out - Cr.
Nominal Account :
All expenses or losses - Dr.
All income or gains - Cr.
MODERN METHOD
Asset Account :
Asset Increase(+) - Dr.
Asset Decrease(-) - Cr.
Liability Account :
Liability Increase(+) - Cr.
Liability Decrease(-) - Dr.
Expense Account :
Expense Increase(+) - Dr.
Ext Decrease(-) - Cr.
Income Account:
Income Increase(+) - Cr.
Income Decrease(-) - Dr.
Owner's Equity Account:
O/E Increase(+) - Cr.
O/E Decrease(-) - Dr.
SUMMARY
Asset & Expense A/c.
Dr. Cr.
Increase (+) Decrease (-)