What I may already know: • Like individuals and households, businesses must keep a record of their finances. • Accounts can be recorded manually or using software packages.
Learning Intentions
In this chapter, I will learn: • Why a business keeps accounts. • Types of accounts. • Types of ledgers. • The steps in accounting.
Key Words: Accountant
Personal accounts Real accounts Nominal accounts Books of first entry Ledgers
Debtors ledger
• Terms used in accounting. • The benefits of accounting software. • Why social accounting is important.
Creditors ledger General ledger Trial balance Final accounts Income Gains
WHY IS KEEPING ACCOUNTS IMPORTANT? As we have seen, many financial transactions take place
within a business: goods are bought, sold and returned, employees are paid wages, debts are paid and received, and day-to-day expenses are met. It is important that all of these transactions are recorded in accounts.
