what are the books of account

8/11/2019 What Are the Books of Account

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5/24/2014 What are the Books of Account?

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What are the Books of Account?Written by: Maria Lourdes M. Yanuaria, CPA

All business establishments and taxpayers are required to keep a record of their day to day

business transactions in order to know the result of their operations. The said record is referred

to as book of accounts.

Whenever a business establishment or taxpayer applies for certificate of registration (COR)

with the BIR, it also required to register the book of accounts. Also, the books of account should

also be registered annually on or before January 31 of each year.

Registration of book of accounts can be any of the following

type

Manual Books of Account

Manual books of account are the traditional journal, ledger and columnar books you can buy in

the book and office supplies store. Recording in the manual books of account is handwritten.

This is the most of popular type of books of account for small enterprises since it is less costly

and easy to register with the BIR.
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Loose-leaf Books of Account

Loose-leaf books of account are printed and bounded journals and ledgers. Recording can be

done using Microsoft Excel.

Computerized Books of Account

Computerized book of account is an accounting program that facilitate efficient and fast recorkeeping.

Books of Accounts Minimum Requirements

The type of books the business will maintain depends on many factors such as the size of the

business and financial capacity. However, regardless of the type of book of accounts the

company would maintain, below are the minimum requirement:

General Journal

General journal is referred to as the book of original entry. It records business transaction in

order of date using the principle of debit and credit.

General Ledger

General ledger is referred to as the book of final entry. It summarized all the journal entries ofan account to get the ending balances.

Cash Receipt Journal

Cash receipt journal is a special journal used to record cash sales and/or collection of

receivables.

Cash Disbursement Journal

Cash disbursement journal is a special journal used to record cash payments of expenses

and/or payables.

Sales Journal

Sales journal is a special journal used to record sales on credit (receivable from customer)

Purchase Journal


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Purchase journal is a special journal used to record purchases on credit (payable to supplier)

Books of Accounts for Service Business

For business or taxpayer engaged in sale of services, it is required to maintain at least four

which are the following:

1. General journal

2. General ledger

3. Cash receipt journal

4. Cash disbursement journal

Books of Accounts for Businesses Engaged in Sales of

Goods or Properties

For business or taxpayer engaged in sale of goods or properties, it is required to maintain at

least six, which are the following:

1. General journal

2. General ledger3. Cash receipt journal

4. Cash disbursement journal

5. Sales journal

6. Purchase journal

Disclaimer: The content of this article may become outdated because of changes in the rules

and regulations over time. It does not substitute the need for inquiring professional advice.

Comments

1. jaycee castillosays:

November 16, 2013 at 01:44

Hello,


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Just want to inquire,

Weve lost our book of accounts due to flood during habagat before, we will file a

business closure this month,We found out it is one of the requirements. We are planning

to have an affidavit of loss. is there any penalty or fees for that when we submit it to BIR?

Thanks in advance MPM.

Reply

Maria Lourdes M. Yanuaria, CPAsays:

November 18, 2013 at 12:35

Hi Ms Jaycee Castillo, thank you for your comment. You need to file a notarized

affidavit of loss to the BIR. The penalty will depend if you can justify the cause of

loss. But based on the schedule of penalty from the BIR, failure to keep/preserve

records required by law or regulations are subjected to penalty ranging from

P200.00 to P50,000.00 depending on the gross annual sales or receipts.

Reply

2. Doris C. Esperanzasays:

December 2, 2013 at 12:04

Hi Maam, Im very much confused of creating journal, I had a small business Gen,

Merchandise actually and we are required to do accounting i had a little knowledge but

unfortunately Im not familiar what are entries for that column and what book should I

used? Hope you can help me thanks a lot

Reply

Maria Lourdes M. Yanuaria, CPAsays:

December 17, 2013 at 10:52

Hi, you may consider hiring an accountant/bookkeeper to help you with record

keeping.

Reply
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