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.
Bookkeeping is a complicated, routinely and often redundant task which takes up significant time when performed manually or using poorly designed tools. For small amount, you can automate the process of your accounting, tax preparation and filing which will save you a lot of time and prevent errors. Check it out
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.
- 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 record keeping.
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 of an 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 Disbursem*nt Journal
- Cash disbursem*nt 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
- 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:
- General journal
- General ledger
- Cash receipt journal
- Cash disbursem*nt 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:
- General journal
- General ledger
- Cash receipt journal
- Cash disbursem*nt journal
- Sales journal
- Purchase journal
Bookkeeping is a complicated, routinely and often redundant task which takes up significant time when performed manually or using poorly designed tools. For small amount, you can automate the process of your accounting, tax preparation and filing which will save you a lot of time and prevent errors. Check it out
Related Posts
- Loose Leaf Books of Accounts: Annual Submission
About Maria Lourdes M. Yanuaria, CPA, RFP, CPP, CFC
Maria Lourdes M. Yanuaria is the founder of MPM Consulting Services in January 2011. She's a Certified Public Accountant, Certified Financial Consultant, Certified Payroll Professional and Registered Financial Planner.
She graduated from the University of Santo Tomas and earned the CPA Title at the age of 19. She previously worked in Sycip, Gorres, Velayo & Co. (SGV), Shell Shared Services Asia BV and Central Bank of the Philippines.
Comments
jaycee castillo saysHello,
Just want to inquire,
We’ve 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.- Maria Lourdes M. Yanuaria, CPA says
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.
- Doris C. Esperanza says
Hi Ma’am, I’m 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 I’m not familiar what are entries for that column and what book should I used? Hope you can help me thanks a lot…
- Maria Lourdes M. Yanuaria, CPA says
Hi, you may consider hiring an accountant/bookkeeper to help you with record keeping.
- rica paraiso says
Hi Good day! I would like to ask this:
1. When do books of accounts needed to present for updates with the BIR?
2. Do we need to renew it every year even not used all the pages?thank you very much. hope to hear from you soon.
- maria cristina bacod says
hi just wanna know how to record in journal and what to record same us ledger for non vat business i have a leasing business office space i dont know how and dont know what to record in my journal and ledger please help me give me sample tnx
- leizel penaverde says
Hi Mam. Do you know what are the requirements of BIR for a company to be registered under a loose-leaf books of accounts because a computerized books of accounts is costly for a small company/foundation?
- Norbin Cayabyab says
Ma’am Doris esperanze I am an Certified Accounting Book keeper, a practitioner. You might want to reach me through my Facebook account. My name therein is Vin Cayabyab.
- Paul says
Hi Ma’am,
With loose-leaf books I am assuming it means punched and bound in ring binder or similar.
Also, I assume Open Office spreadsheet or similar (say Google docs) would be as good as using Excel.
Thanks.
Regards
Paul - Mira says
Hi Mam, would like to ask what are the steps in submitting a computerized books of accounts. our fiscal yr ends this March2014. When is our deadline for the submission?
Hope u can give me advice. thanks alot.
- grace says
hi po ask ko po pano ang recording ng book of accounts ng non profit organization kailangan pa po ba mag prepare FS ?
- Arnel says
So the record in sales journal are only the transaction that are not yet paid?
A’m i right?
If there is no receivable there will be no record on sales journal.
Right or wrong? - Arnel says
how about the records in the general journal and cash receipt journal?
if you have recorded your sales income for a day in general journal, is it need to be recorded in cash receipt journal.
please help.. thanks… - Rey Flores says
We are a service VAT company. As such, we issue an Official receipt for our services, but we have not noticed early on that our OR has this phrase ” THIS DOCUMENT IS NOT VALID FOR CLAIMING INPUT TAXES” which is appropriately for NONVAT companies. What is our remedy for it? Some of our clients refuse to accept our OR.
- Ernie John Malino says
Hello,
What legal action that BIR might possibly take on non-stock and non-profit Smile Citihomes I Condominium Corp in Barangay Kaligayahan, Quezon City with Tax Identification Number 214-510-643-000 for failure to file with the Bureau of Internal Revenue returns of net income for the years, 2004 to 2014? We noticed a lot of questionable entries in their financial reports. The yearly salaries and wages amounted to more than 2,100,000.00 Pesos and there is no detailed report about it. The corporation for years does not issue official receipts for our condo dues, parking fee, water bill, posting fee, etc.
I hope to receive a reply from you soon. - ROJ REBOLLO says
Hi Ma’am,
I would like to ask if what should I write or fill with my general ledger? thanks!
- John says
Hi Miss Lourdes,
Is there a material you can refer for study so I can do the book keeping for our family business?
Our business is just starting and relatively small (as of now) and I’m not sure if we should get a professional to do the accounting for us (how much would it cost us if we decided to get a book keeping service?)Thanks!
- Doris Lumapas says
Hi..can I ask how many books of account do I need for my business? I’m leasing only 4 commercial spaces..with 4 lessors.. and what are those books? Thanks in advice..
- gina bengua says
Hi,
We are Vat Registered as required by our client. We have 6books- journal, ledger, subsidiary purchase journal, subsidiary sales journal and 2 columnar notebooks. I understand what to write on the first 4 books but i dont know what should be written in the columnar notebooks. Pls adv. Thank u.
- george says
Hi Ma’am.. good day! thankful po ako sa Tips niyo.
I’m an employee po and Officer In Charge ng company sa isang outlet nila. Ganito po kasi yun yung ledger po kasi namin eh na late po ng pag update at naubos na kasi ang incharge na sales dun e siyang binigyan ng responsibilty to monitor kaso nagresigned na xa (AWOL) and yun hindi na namonitor till then nalaman ko na ubos na ang lahat ng ledger..nagpunta ako sa BIR at ang sabi 20thou daw ang magiging penalty sa ganung kaso. Sir I really need an advice from you ano paraan for that case since employee lang din ako at sa akin mashoulder ang ganung halaga.. Sana po matulungan niyo ko..
SALAMAT po.. GOD BLESS at sana marami pa kayo matulungan..
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