Regular accounting: what it entails and how to carry it out
Ordinary accounting is defined as follows: Before we can grasp what it is, it is vital to point out that all subjects who engage in economic activity are obligated by law to maintain accounting records.
The bottom line is that all firms must keep track of all economic and financial transactions including the receipt and spending of money, as well as all other economic activity with ภงด 1 ภงด 3 ภงด 53.
What does the term “Ordinary Accounting” refer to?
Companies may choose between two alternative accounting regimes, depending on their specific characteristics: simplified accounting or regular accounting.
When it comes to accounting, what is the difference between simplified and regular accounting? We may conclude by stating that conventional accounting is required for specific topics (which we shall address later) and that it enables the entrepreneur to maintain a precise, analytical, and orderly administration of all economic operations associated with his or her firm.
The simplified accounting system, on the other hand, is designed for “smaller” businesses, and although it enables you to benefit from some tax breaks, it does not provide for the same level of cost control that we saw under the usual regime.
When the use of regular accounting is required
Ordinary accounting is required for corporations and commercial organizations subject to IRES (i.e., the Company Income Tax), as well as for sole proprietorships and partnerships that, according to Article 85 of Presidential Decree, had revenues in the preceding tax period that exceeded:
- 400,000 if they engage in service-related activities
- 700,000 if they engage in other types of activities
These are examples of things that may fall within this category:
Natural people engaged on commercial operations, such as sole proprietorships; general partnerships; limited partnerships; de facto corporations carrying on commercial activities; armament companies; and limited liability companies.
It is also possible for businesses to maintain regular accounting records even if the law does not impose any obligations on them. This is a solid and effective option that may ensure the entrepreneur has strong management control over the company’s operations in order to keep all of the company’s activities under control.