Basics of Bookkeeping
What is bookkeeping?
It's the process of recording all financial transactions of a business.
What are the two bookkeeping methods?
Single-entry (records transactions once) and double-entry (records transactions twice).
What tools are commonly used in bookkeeping?
Accounting software like QuickBooks, Excel, and cloud storage.
What differentiates bookkeeping from accounting?
Bookkeeping involves recording transactions; accounting interprets and analyzes this data.
What's cash-based accounting?
Records revenues when cash received, expenses when paid.
Why is accounting software useful?
It automates bookkeeping, simplifies recording, and generates reports.
How important is bookkeeping for small businesses?
It's crucial to track income, expenses, and prepare for taxes.
What's accrual-based accounting?
Records revenues/expenses when incurred, not when cash changes hands.
Can bookkeeping be done manually?
Yes, but it's more prone to errors than using software.