Book-keeping is defined as the act of recording business transactions in such a manner that the financial position of a business could be ascertained and made readily available at any given period of time.
Book-keeping cannot be clearly distinguished from accounting and so the book keeper writes up books and also makes accounting records, whilst the accounting designs and controls the book-keeping system and as well, utilizes the information it produces to help him prepare financial statements and to advise management.
Book-keeping is most importantly, a practical subject and so has its purpose in giving a guide to every business transaction, that is, book-keeping is made for business and not business for book-keeping.
This is an extremely important fact, and the reader must realize from its beginning that although the essential principles of book-keeping remains unchanged, the method of applying these principles in practice must be sufficiently elastic to be capable of application to any type of business.