Bookkeeping is the recording of purchases, sales, payments, receipts, and other financial transactions made by the company. In large corporations, bookkeeping is a part of accountancy – the collecting, measurement, processing, and communicating the financial information about business activities. In small companies, bookkeeping realizes the accounting functions because small businesses do not implement financial and other operations that big companies do.
Journalizing is a process of recording financial transactions in a journal that gives a complete record of each transaction in one place. Computerized journals included into bookkeeping software programs are designed by software developers to look like the manual journal page. Shortcuts allow bookkeepers to select account names and numbers from drop-down menus. Every organization uses the journals for recording its financial transactions.
Bookkeepers can record company’s transactions and events daily, weekly, or when time permits. The company’s size and quantity of transactions determine how often the company’s bookkeeper needs to record transactions.
Posting is a process of transferring journal entry information to the ledger. Computerized bookkeeping and accounting programs make posting automatic and immediate.
Without adjusting entries the bookkeeping or accounting program can produce inaccurate, incomplete, and perhaps misleading financial statements.