Cyclopedia of Commerce, Accountancy, Business Administration, v. 04 (of 10)

by American School of Correspondence

DEFINITION AND OBJECTS OF BOOKKEEPING

1. Bookkeeping is the art of recording the transactions of a business in a manner that makes it possible to determine the accuracy of the records.

The objects of bookkeeping are:

(a) To exhibit a record of the separate transactions of a business.

(b) To furnish statistical information in respect to any particular class of transactions.

(c) To exhibit the financial standing or condition of a business.

When properly assembled the bookkeeping records become accounts (for definition, see Dictionary of Commercial Terms).

If correct methods are used, the bookkeeping records will be assembled or grouped in a manner to show their exact nature and their bearing on the status of the business, or the standing of the account.

2. Debit. The term debit designates those items in an account representing values with which we have parted, or transferred to another person or account. Debits are always placed on the left side (or in the left-hand column) of an account. Debits to persons are of the following classes: