Bookkeeping
Task: Generating
Report on Profit
and Loss
LEARNING COMPETENCIES
• Identify the reasons for keeping
business records (CS_EP11/12B-ENTREPIV-j-4);
• 2. Perform Key Bookkeeping Task
(CS_EP11/12B-ENTREP-IV-j4);
WHAT IS BOOKKEEPING?
•Bookkeeping is the
process of recording and
organizing a business’s
financial transactions.
RECORD
KEEPING
• is a framework by which the
records of an organization are
created and managed in a way
that supports a business.
BUSINESS RECORDS ARE SO
ESSENTIAL IN THE
BUSINESS
• These records can be physical
or digital, which include
meeting minutes,
memoranda, employment
contracts, accounting source
documents and legal
IMPORTANCE OF KEEPING
GOOD RECORDS
• 1. It Monitors the Progress of the
Business
• 2. Prepares the Financial Statements
• 3. Identify sources of Income
• 4. Keep Track of the Deductible Expenses
• 5. Keep Track as the Basis in Property
REASONS FOR
KEEPING BUSINESS
RECORD:
• 1. Constant record keeping
helps you as a business owner
to track the performance of
your business (whether you are
making a profit or a loss).
•2. It gives you
vision on which of
your product is
moving in sales.
•3. It also gives you
a clear direction
to aid your
business
decisions.
•4. Your record
keeping figures
helps in making
plans for future
operations.
•5. Should you need
financial assistance from
banks and other financial
institutions, proper record
keeping of your business
helps you stand a better
TYPES OF
BUSINESS
RECORDS THAT
SHOULD BE
KEPT
1.Proof of Income
Received/Gross
Receipts
• Gross receipts are the income you
receive from your business. You
should keep supporting
documents that show the amounts
and sources of your gross
receipts.
Documents for gross receipts
include the following:
• Cash register tapes
• Deposit information (cash and credit sales)
• Receipt books
• Invoices
• Forms 1099-MISC
2. Documentation for
Expenses
• Your supporting documents should
identify the payee, the amount paid,
proof of payment, the date incurred,
and include a description of the item
purchased or service received that
shows the amount was for a
business expense.
Documents for expenses
include the following:
• Canceled checks or other documents
reflecting proof of payment/electronic
funds transferred
• Cash register tape receipts
• Account statements
• Credit card receipts and statements
3. Prior Tax
• An Returns
official document that income
taxpayers are required to
complete to state income
amounts, deductions,
contributions and related financial
information for tax purposes.
•More delay = More
penalty
If you have any pending past year Tax returns,
we strongly recommend getting it done as soon
as possible to reduce the risk of a penalty.
4. Employment Tax Forms
•Keep all records of
employment for at
least four years.
5. Documentation for Assets
• You must keep records to verify
certain information about your
business assets. You need
records to compute the annual
depreciation and the gain or
loss when you sell the assets.
Documents for assets should show
the following information:
• When and how you acquired the assets
• Purchase price
• Cost of any improvements
• Section 179 deduction taken
• Deductions taken for depreciation
• Deductions taken for casualty losses, such
as losses resulting from fires or storms
• How you used the asset
• When and how you disposed of the asset
• Selling price
• Expenses of sale
6. Records for Purchases Made
• With the knowledge of bookkeeping
concept, you’ll feel more confident and
excited in your business’s future and an
increase in profitability. Basic book
keeping will help your small business
succeed.
