An overview of different types of accounting and bookkeeping systems

 

Bookkeeping is a vast process of accounting that entails many types and subtypes. So, though people might have a general idea about what bookkeeping is all about, it is quite a vast genre for them to know all about the different types and genres it includes. However, this isn’t the same thing for a B. com. graduate. As such, when you study B. com. at the top university in Jaipur, you will learn all about the different facets of financial accounting. But before you get enrolled in that course, here’s giving you a brief overview of the different types of accounting and bookkeeping systems.

Types of bookkeeping

In single entry booking, the transactions are recorded as the bills are paid and the deposits are made into the company account. This only works for the small companies that have a low transaction volume. If the company is of a more extensive complexity and size, a double-entry bookkeeping system is needed. Two entries need to be made for every transaction.

Cash accounting system

One of the first decisions that you need to make while setting up the bookkeeping system is whether or not to use an accrual or cash accounting system. If you have a small business, though even some large consulting practicing businesses use this, you might want to stick to cash accounting. With cash accounting, you will record the transactions when the cash changes hands. Cash can mean anything from electronic funds transfer to actual money. There are times when businesses start their journey with cash accounting and then move on to accrual accounting as they expand.

Accrual accounting system

If you are going to offer the customer’s credit and if you need to ask for credit from the suppliers, then you will have to rely on an accrual accounting system. Thanks to accrual accounting, you can record the sales or purchases immediately, even when the cash does not change hands until a later day and time. This usually happens in the case of accounts receivable or accounts payable.

So, if you want to have a career based on accounting or bookkeeping, get enrolled in the best university in Jaipur to gain valuable knowledge to help your professional life in the future.

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