![]() ![]() Thus for example, you are able to use bookkeeping to obtain answers to questions of the sort: 'What is the cash balance?' 'What is the balance at the bank?' 'What credit is available to any particular supplier?', and more. Current Control - By means of up-to-date bookkeeping, it is possible to obtain current data in real time.Bookkeeping is in fact the raw material used as a basis for determining the profit. Determining the annual profit - Determining the precise annual profit is of the utmost importance, both to you as the owner of the business and to the Tax Authorities (Income Tax, V.A.T.It is obvious that without proper records, it would be difficult for you to reconstruct past transactions relying on your memory alone. The problem of human memory - In a commercial business, even in the smallest business, hundreds and thousands of transactions are carried out over a year.It is important to remember that we are in fact talking in a new language that you have yet to learn, as you had to learn any foreign language when young.īefore we go into the structure of the language, we will try to see which problems are answered by bookkeeping. This is similar to what happened with bookkeeping, in that it answered the severe problems that arose in managing modern commerce. The discovery of "canned foods" on the other hand gave an answer to the need to keep food fresh for long periods. Thus, for example, the invention of the "airplane" provided an answer to the problem of reducing travel time between distant cities. In each area of life, techniques are developed and inventions made to answer the problems that arise therein. After reading the material you will find that the "bogey" is not that bad. The following pages in our Bookkeeping Course attempt to give a brief summary of the principles of Journal Entry bookkeeping. ![]()
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