Bookkeeping is recording and organizing a firm's day-to-day financial transactions. These include invoices, receipts, preparing customer invoices, processing payroll, revenue, taxes, earned interest, and other operational costs.
It also includes preparing reports and paying invoices. The goal of bookkeeping is to keep track of daily transactions accurately which will be necessary for accurate accounting.
There are two types of bookkeeping, they are:
Single-entry bookkeeping is an accounting system that uses one entry per transaction to record the date such as cash taxable income, tax-deductible, expenses, etc.
The double-entry bookkeeping system uses two entries per transaction to balance the accounting equation constantly: Assets = Liabilities + Equity. In this system, every entry has an exact opposite entry in another. And every transaction influences two accounts, which include liability, asset, revenue, equity, or expenses.