Introduction and meaning of Book Keeping

Introduction of book keeping
Book keeping is that branch of knowledge, which tells us how to keep the record of financial transactions in a systematic manner. Each business deals a number of financial transactions daily, which can be expressed in monetary value. In order to find out the profit or loss of the business, it is essential to keep a complete and systematic record of these business transactions. The necessity of book keeping arose mainly due to the fact that memory of the human beings is limited. A person may fail to recall all the transactions, in the absence of written records, he had done. A person must maintain a note or diary in which details of the transactions have been recorded. The fundamental idea behind this record is to show a correct position relating to income and expenditures.

Meaning of book keeping
Book keeping refers to the recording of economic events. It usually involves only the recording of economic events (transactions) and so it is just one phase of the accounting process. It is a recording phase of accounting and involves journalizing,
posting into ledger accounts and balancing and closing of ledger accounts. It is only a part of accounting. It is the science and art of recording transactions in money's worth so accurately and systematically, in a certain set of books, that the true state of businessman's affairs can be correctly ascertained.