QUESTION 35 . What do you mean by book keeping ? And what are the elements of book keeping ?
Answer 35. MEANING OF BOOK-KEEPING : Book- keeping is an art as well as a science of recording business transactions and other transactions of financial nature related to an individual , firm, company , corporation and other associations of persons and institutions in a certain set of books regularly according to prescribed rules and regulations on the basis of some definite system for fulfilment of certain objects.
It is important to note that only those transactions and events related to business are recorded which can be expressed in terms of money. Book -keeping includes ;
1. Recording of transactions and events in proper books of account , i.e , journal and various subsidiary books .
2. Classifying and posting in ledger and totalling and balancing of accounts in ledger. All records before preparation of trial balance form the subject-matter of book-keeping.
ELEMENTS OF BOOK-KEEPING :
1. Book-keeping is an art as well as science of recording business transaction.
2. Business transactions and other transactions are recorded in terms of money.
3. Transactions are recorded in a certain set of book.
4. Transactions are recorded regularly according to certain rules and regulations.
5. A certain system of book-learning and accounting is followed.
6. Transactions are related to an individual, firm, company, corporation , institution and association of persons.