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Bookkeeping: What is it and what books are mandatory

Jhon s
Bookkeeping: What is it and what books are mandatory

Bookkeeping is an activity that must be fulfilled and can be a very useful tool to obtain a real image of the activity carried out by any business and to be able to carry out adequate and controlled planning. If you carry out a business activity, you will be interested in meeting them.


What is Bookkeeping?

Bookkeeping, which is usually known as Accounting, is the introduction of all transactions of any kind carried out by an entrepreneur (whether a natural or legal person) in an accounting program that meets the requirements established by commercial regulations. Its objective is to record the transactions carried out by the company and reflect them as established by the accounting standards in force since the General Accounting Plan requires that a company's operations be correctly accounted for.


Accounting is not something that was recently invented. Clay tablets of Sumerian origin from about 6,000 BC and Egyptian hieroglyphs have been found in which an accounting activity can already be seen.


The importance of accounting correctly

Bookkeeping must be very precise so that the accounting and fiscal results obtained in the development of activity are correct. In addition, correctly accounting for operations is very important to have a true image of the company.


Due to that importance, Bookkeeping is usually carried out by a bookkeeper or accountant. It is the person who is in charge of taxing financial transactions of the business in the accounting books on a daily basis. For each transaction, there must be a document that describes it, for example, an invoice, a receipt, a supplier payment, bank payments, etc. Based on this information, the result of the activity and the financial situation of the company is determined, and this allows the future planning and strategy of the company to be carried out.


What are the mandatory accounting books?

As we explained in our article on the legalization of accounting books and as indicated in article 25 of the Commercial Code, the mandatory books are:


Book of Inventories and Annual Accounts. It consists of:

Initial Balance Sheet.

Balance of Sums and Balances.

Closing inventory of the fiscal year.

Annual accounts with:

 Balance Sheet.

Profit and Loss Accounts.

Statement of Changes in Net Worth.

Statement of Cash Flows.

Exercise memory.


How to carry out Bookkeeping correctly?

As it is a technical procedure that requires time, knowledge, and precision, it is necessary to have a specialist who deals with it and who knows perfectly the requirements demanded by the accounting regulations. At GM Tax we adapt to the needs and requirements of each company. You just need to explain your situation to us and we will offer you a specific plan for your business. We have a lot of experience in the Bookkeeping Services Markham, especially in what refers to the service sector and businesses via the Internet.

Jhon s
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