Books Of Accounts
Manual Books of Accounts
These are the books you can buy in office supplies stores. The books should be updated manually (handwritten). Below are the common books used:
- General Journal - debit and credit principle. It's like a diary where you will record your transactions in chronological order according to the date.
- General Ledger - this is the summary of all your accounts. This is used to prepare your financial statements.
- Cash Receipts Journal - where you will record cash sales or any collection of your receivables. Put the official receipt number as your reference.
- Sales Journal - where you will record your sales on credit. Reference number is your sales invoice.
- Cash Disbursements Journal - where you will record all your cash payments or expenses made.
- Purchase Journal - where you will record your purchases made on credit.
However, unlike manual books of accounts, the registration deadline is "15 days after the end of the calendar year". These records should be printed and book-bounded together with a treasurer's affidavit indicating the completeness and accuracy of the books. If the number of pages per books is just minimal, you can ask the BIR if you can combine all books but properly labelled as to what kind of book.
Computerized Books of Accounts/Computerized Accounting System (CAS)
This is different with the loose-leaf books. Sometimes you need to clarify this with the examiner since same Form 1900 is being used. CAS is the use of accounting softwares like ERP, SAP, Peachtree etc. You need to provide proof to BIR that the system you will be using is accurate and capable of keeping the books of accounts. There are a lot of requirements like system and process flow of the software, back-up or disaster recovery plan etc. (refer to RMO 21-2000 for more details about the application and requirements)
Same as loose-leaf books, the CAS generated books should be stored in a CD properly labelled with the name of the taxpayer, taxable year, serial number and volume number of the books of accounts within "30 days from the close of the taxable year". A treasurer's affidavit needs to be attached also.
So those are the books of accounts. Another thing to note is that, if your quarterly sales exceed P150,000, you need to submit audited financial statements to the BIR together with your annual income tax return unless you opted for the optional standard deduction (OSD).