Basic Bookkeeping

Recording transactions, source documents

Recording Business Transactions

Bookkeeping is the systematic recording of all financial transactions in a business. Every transaction has a source document (receipt, invoice) as proof. Transactions are recorded in journals and then posted to ledger accounts. Accurate records are essential for managing a business.

Example

Source Documents

• Receipt: proof of payment received • Invoice: a bill sent to a customer • Cheque counterfoil: record of cheque payments • Bank statement: record from the bank of all transactions • Cash slip: proof of a cash purchase Every transaction must have a source document — no document, no entry!

Note

Remember

Bookkeeping follows the rule: every transaction must be recorded accurately and on time. Source documents are proof that a transaction happened. Keep them organised (filed by date or number). Good bookkeeping helps the owner, SARS (tax) and potential investors.

Key Vocabulary

BookkeepingSystematically recording all business financial transactions

TransactionAny business activity involving money

Source documentWritten proof that a transaction took place

InvoiceA document requesting payment for goods or services

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Bookkeeping

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