The knowledge of Book-keeping and accounts is very essential for an engineering student. In future he would either own a commercial concern or would serve a government or a commercial concern. Therefore, he must be will acquainted with the subject.
"Book-keeping" is the art of recording business transactions systematically. It is the art of reducing each transaction to its simplest term.
"Transaction" means the exchange of money or money's worth between one party and another.
Proper book-keeping show all purchases, sales and returns, quantity and value of goods available in the stock, transaction with creditors and debtors, information about assets and liabilities, cash available, profit and loss accounts etc.
Book-keeping (or sometimes known as Account-Keeping) informs us regarding:
(i) The financial effect of each business transaction.
(ii) Combined effect of all transactions.
(iii) Correct financial status of the firm.
(iv) All purchases and sales.
(v) Quantity and value of goods available.
(vi) Assets and liability of the firm.
(vii) Cash availability.
The following is a general picture of entries in a Book-keeping process:
It consists of four Journals and one ledger:
(i) The four Journals are:
a. The Sales Journals
b. The Purchase Journals
c. The Cash Journal
d. General Journal (All entries which cannot be recorded into any of the above three journals are entered in this).
In the ledger there are separate pages for each record we wish to keep. It means that there will be separate pages for account of the following:
e. Proprietor's accounts
|Single Entry Accounting||Depreciation||Dividends in Accounting|
|Double Entry Accounting||Discount||Assets|
|Ledger in Accounting||Liability||Debenture|
|Journal Entry||Trial Balance||Payroll Accounting|
|Drawings in Accounting||International Trade||Admission of a Partner|
|Annuities||Bill of Exchange|