Concept of Book Keeping

Flow of money is most crucial for any organization, which not only requires proper controlling but also monitoring. At any given point of time, a company should be able to show it's financial position, which entirely depends on a strong book keeping system. This means, an organsation must have a system like a book register or computer software. This is followed with making transactions with various parties. Once transactions are placed, the organization should focus on executing it. It starts with creation of  various accounts which are being dealt like purchase of goods, transportation of goods, salary paid to employees, rent paid to landlord, sale of goods, etc. When this work is done on a day to day basis, it is called Book Keeping.

The Book Keeping is a never ending process and goes year long. But at least once in a year, an organization must evaluate itself to see their performance. This is where all the accounts created while Book Keeping are closed and conclusions are drawn. Through this, the organization understands their efficiency, total goods sold, total goods acquired, total expenses, total taxes and finally profits / losses. 

Before learning Book Keeping, one should get well versed with the below concepts:

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