The Bookkeeping Program Automates Creating the Financial Statements and Other Financial Documents

Create financial statements with the computerized bookkeeping or accoutning program.

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 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.

Bookkeepers must record each company’s financial transaction in a journal and post entries to a ledger.

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 in 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 journals for recording its financial transactions.

The journal includes the next information about every transaction:

 Date of the transaction Date of the transaction Dollar amount The dollar amount of the credit and debit
the document title Titles of affected accounts explanation of transactions Explanation of transactions

Bookkeepers can record the 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.

Benefits of using the computerized bookkeeping and accounting programs:

  • eliminating many of the bookkeeping and accounting tasks; 
  • occurring many of the bookkeeping and accounting tasks simultaneously; 
  • eliminating errors that can occur in the case of manually writing, rewriting, and calculating.

When all transactions have been processed, some adjusting entries are still required:

  • earned assets and revenues that not yet entered into the bookkeeping or accounting program;
  • incurred liabilities and expenses that not yet entered into the bookkeeping or accounting program;
  • prepayments that are not prepaid; 
  • recording depreciation expense and others.
computerized bookkeeping and accounting programs

Without adjusting entries the bookkeeping or accounting program can produce inaccurate, incomplete, and perhaps misleading financial statements.