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All businesses need to maintain financial records in order to find out if they are making a profit. These records exist in several forms. In daily business operations recordings of business transactions are first made in a journal. This journal is sometimes called the book of original entry. In the journal, bookkeepers record sales, uses of raw materials, and purchases. Periodically, bookkeepers transfer figures from the journals to ledgers. This activity is known as posting. The ledger is a book containing all the accounts of a company. An account is a financial record, which contains information about a group of similar transactions. For example, all sales activities are recorded in one account. Another account may be record of all the costs of raw materials.
Once, bookkeepers served as a good method of determining whether or not a company was making profits and whether or not it owed any taxes. Small business owners could keep their own books and make business decisions based on the information found there. …
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