Accounting For Dummies®, 4th Edition

Chapter 3. Bookkeeping and Accounting Systems

In This Chapter

• Distinguishing between bookkeeping and accounting

• Getting to know the bookkeeping cycle

• Making sure your bookkeeping and accounting systems are rock solid

• Doing a double-take on double-entry accounting

• Deterring and detecting errors and outright fraud

• Choosing computer software wisely

I think it's safe to say that most folks are not enthusiastic bookkeepers. You may balance your checkbook against your bank statement every month and somehow manage to pull together all the records you need for your annual federal income tax return. But if you're like me, you stuff your bills in a drawer and just drag them out once a month when you're ready to pay them. And when's the last time you prepared a detailed listing of all your assets and liabilities (even though a listing of assets is a good idea for fire insurance purposes)? Personal computer programs are available to make bookkeeping for individuals more organized, but you still have to enter a lot of data into the program, and most people decide not to put forth the effort.

I don't prepare a summary statement of my earnings and income for the year. And I don't prepare a breakdown of what I spent my money on and how much I saved. Why not? Because I don't need to! Individuals can get along quite well without much bookkeeping — but the exact opposite is true for a business.

There's one key difference between individuals and businesses. Every business must prepare periodic financial ...