The term bookkeeping is composed of two words 'book' and keeping'. book means a set of records of accounts' and keeping means, to ' retain something for use in the future. So bookkeeping is an activity an activity concerned with the recording of financial information relating to business or other governmental and non-governmental organization for use when needed. It is the branch of knowledge which tells us how to keep a record of financial transaction. Without a proper method of recording financial transaction, it is not possible to remember various financial activities taking place during the particular period of time. Bookkeeping includes recording the transactions in a journal, posting such transactions into ledger and balancing the accounts. All the record is the whole subject matter of book keeping. By and large, book keeping is the art of recording business transactions in a set of books in a systematic way.
The following are the two objectives of book keeping:
- To keep record of financial transactions regularly and show their financial effects.
- To show the joint effects of all the transactions made in a certain period of time and reflect the financial position of a business completely.