Bookkeeping is based on the principle of supporting documents. Each transaction must, in principle, be recorded in the books of accounts daily. A supporting document must accompany each transaction, basically evidence, justification, or explanation pertaining to the transaction. Supporting documents describe in detail the nature and purpose of the business transaction.
Bookkeeping captures the following financial transactions:
For instance, a sale must be supported by an invoice and a receipt. Cash receipts, bank statements, journals, and supplier invoices are other common documents used to support transactions.
Records of transaction supporting documents are important not only as evidence of transactions, but also to provide transparency in the management of funds within an organization. Since prepared accounts are subject to independent audit, these documents provide an audit trail for each transaction. It is natural for humans to forget, therefore, should certain transactions be questioned during an audit, these documents provide clear evidence as to the nature and purpose of the questioned transactions.
A bookkeeping service will allow you to handle other essential business functions much more easily. We offer hassle-free bookkeeping services in Malaysia to help your business focus on its core activities.
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