My read of the expression ‘accounting by hand’ is that it is the description of the way an enterprise’s financial transactions were recorded before the arrival of computerised accounting some 30+ years ago. What people recorded on paper when doing ‘accounting by hand’ was all the financial transactions of the enterprise.
Now the initial information recorded included all the details relating to all the financial transactions that took place in the enterprise (i.e. date, description, accounts with the amounts allocated to the appropriate debit and credit columns). This information was recorded by hand in the journals or the ‘day book’ as it was called.
All the information contained in the journals was then transferred (posted) by hand into the general ledgers which grouped the transactions by their common and shared attributes (assets, liabilities, owners equity, revenue and expenses). Posting included further notations by hand in the journal to explain where the information from the journal went to.
After the general ledger where checked for accuracy with a trial balance (being prepared by hand), the accountant was then able to prepare the financial statements by hand which grouped the appropriate accounts to calculate the COGS and Gross Margin.