By Oyinlola Oresanya (@oyinnlola)

Did you just say “Boring”? Don’t worry. I totally get you. I used to think book keeping was a humongous task for an accountant or someone in a glorified profession similar to that.

Book Keeping is a rather interesting topic and has been identified as one of the solutions to managing Modern Commerce. And just like any other foreign language, the language of Book Keeping has to be learnt.

Even though there are a lot of reliance on the human memory, you would agree with me that it is currently impossible to reconstruct past transactions relying on one’s memory alone without proper records. (Think Book Keeping!). Even in the smallest business, hundreds and thousands of transactions are carried out over a year.

When you take profit away, of what use is a business? (Did you just think Book Keeping?). Bookkeeping is in fact the raw material used as a basis for determining the profit.

There is a certain inner joy or fulfillment that comes from being able to answer these questions about your business: What is the balance at the bank? What credit is available to any particular supplier? Etc.

(You are right. Book Keeping!)

Without proper records, you would struggle to answer those questions.

Business growth relies on proper business analysis e.g. how to increase the profits of the business, how possible it to reduce any particular class of expense and so on. The main tool that will assist in an analysis of this type is the bookkeeping system.

Now you see. The importance of Book Keeping cannot be overemphasized. There’s more to this topic than meets the eye. We will be discussing this all important topic over the next few posts. We will keep you posted. Cheers to our book keeping journey!


Book Keeping Series 2

Bookkeeping Conventions

There are two (2) basic conventions for Bookkeeping:

  1. The Convention of the Common Monetary Denominator

Let’s try the following calculations:

Let us assume that you are deal in textiles. On the 15th of the month, you bought 13 kilogram of fabric and 17 meters of material.

It is clear that adding the 2 numbers (13 and 17) amounts to 30 but it lacks all significance as the base is different (a kilogram – a unit of weight as compared to a meter – a unit of length).

However, if we add the following data to the example, we will reach a logical result. Let us assume that the material is N 1,000 a kilo or N50 a meter, you can state in monetary terms that you bought goods with a value of N13, 850/ (13 x N1000 = N 13,000 plus 17 x N 50 =N 850, Total is N 13,850)

It is clear, therefore, that the common basis for every bookkeeping record is the monetary value.

  1. The “Dual Aspect” Convention.

This convention is in fact at the very heart of a bookkeeping system.

Let’s assume that Shade buys a pair of shoes from Ngozi for N80 and sells a kilogram of fish to Ngozi.

We can see here as well that although we are concerned with a single commercial transaction (from Shade’s point of view – buying shoes for cash, from Ngozi’s point of view – selling shoes for cash). We are still left with the “dual aspect” convention as follows:

  • Shade – “received” goods (shoes) and “gave” money
  • Ngozi – “received” money and “gave” goods (shoes)


The language of bookkeeping tends to record a single transaction in dual manner. Once, what the tradesman “received”, and the second time, what that same trader “gave”.

Dual Aspect is the underlying basis for the Double Entry Accounting System.

The Double Entry Convention:

In bookkeeping, each single” commercial transaction is recorded twice.

On the “Received” side and then again on the “Gave” side

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