Use of Double Entry Bookkeeping System in any Business Transaction

March 26, 1958 BIR RULING NO. 215-58 Mr. Nicolas G. Gela 40 Rosario St. Bacolod City S i r : In answer to your inquiries, I have the honor to inform you as follows: The use of the double entry bookkeeping system is permissible in any business transaction and, therefore, said system may be used by retailers and wholesalers. LLpr Pursuant to Section 334 of the National Internal Revenue Code, as amended, all corporations, companies, partnerships, or persons required by law to pay internal revenue taxes shall keep a journal and a ledger, or their equivalents, unless their gross quarterly sales, earnings, receipts, or output do not exceed P5,000.00, in which case they shall keep a simplified set of bookkeeping records duly authorized by the Secretary of Finance. Accordingly, and on the assumption that your gross sales, earnings receipts, or output do not exceed P5,000.00 a quarter, you can use any simplified set of bookkeeping records, provided that its use has been previously authorized by the Secretary of Finance. The use of books of accounts other than those mentioned in said Section 334 cannot be allowed. Internal Revenue agents and examiners are not authorized to take the books of accounts and other records of a taxpayer outside the latter's place of business without issuing therefor B.I.R. Form No. 19.14, pursuant to Section 20 of Revenue Regulations No. V-1 (Bookkeeping Regulations). If what you mean by "license" is the privilege tax imposed on occupations, please be further informed that a bookkeeper, unlike a certified public accountant, is not subject to any occupation tax. You can, therefore, pursue your occupation as bookkeeper without paying any privilege tax. prll Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue