Range of Chance account books
It can really be a headache to figure out what each type of record does but after doing some research, I can give you a brief idea. It is vital to have a good understanding of the financial recordkeeping and reporting processes. Financial recordkeeping starts with an economic event, for example, the receipt of goods from a supplier, and a primary document is produced as soon as possible to record the movement of goods/services/cash to and from the company. These documents are then forwarded to the accounts department where they are summarised and analysed and recorded in the account books, for example, ledgers, journals, etc. Journals provide a daily record of transactions and act as a book of original entry whilst ledgers are books of final entry where the transactions recorded in the journals are listed in seperate accounts. Both types of book traditionally follow the rules of double entry bookkeeping where both the debits and credits of each transaction are recorded beside each other to ensure accuracy. If both totals balance you can be confident that there are no mistakes in your calculations.
Double bookkeeping in a private ledger
This is where the reporting part of the process comes in. Periodically, the balances are extracted from the account books and assembled into a trial balance which is then used as the basis for preparing accounting statements, usually a profit and loss account and a balance sheet. These financial statements are then made available to managers and external users to help reach important decisions on the direction and future of the company. I appreciate that this is a very basic illustration of the way that accounting works and I apologise to all the accountants reading but I hope this goes someway to de-mystifying the scary nature of financial records.
It is now my duty to encourage any interested researcher to actually dive in to these records, rather than tentatively considering them from the safety of the paddling pool. Financial records provide the main evidence and measure of how successful a business has been. And let's face it, the main aim of business is to make a profit. But the records can tell you so much more than just the income and outgoings of a company. The interesting bits are contained in the finer details, for example, the journals and ledgers could possibly tell you how much an individual spent on their boiled egg at breakfast on a business trip, enlightening you to their eating habits or a ridiculously cheap payment for a new piece of machinery might provide an insight into the cosy relationship the company has with its suppliers. The possibilities are endless and if you are brave enough to read between the lines of the grids containing those scary figures, you may just discover something completely unexpected.