In this definition
What the records cover
Bookkeeping includes setup, recurring bookkeeping, catch-up work and cleanup. The records include a chart of accounts, opening balances, transaction entries, receipt matches and journal postings.
Bookkeeping and accounting
Bookkeeping maintains transaction records. Accounting uses those records to prepare reports, investigate differences and interpret financial performance. Reliable records are the starting point for both.
Common questions
What Is the Accounting Equation?
The accounting equation is Assets = Liabilities + Equity, which forms the foundation of double-entry bookkeeping. This fundamental formula ensures that a company's balance sheet remains balanced at all times. Assets represent what the company owns, liabilities show what it owes, and equity reflects the owners' stake in the business.
What Is Double-Entry Accounting?
Double-entry accounting is a system that records every transaction in at least two accounts, maintaining the accounting equation balance. Each transaction includes equal debits and credits, creating a comprehensive audit trail. Professional accounting outsourcing services use this method to ensure accurate financial records and compliance with GAAP standards.