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When should I renew my BN Registration?Early Filing – One Hundred Eighty (180) Calendar Days prior to the expiration date
Regular Filing – Within ninety (90) calendar days following the expiration of the registration Late Filing or Grace Period – Within ninety (90) calendar days after the Regular Filing period subject to a payment of a surcharge of fifty percent (50%) of the registration fee. All BN registrations not renewed within the grace period shall be immediately cancelled and shall be made available for registration by other parties subject to existing rules on registrability.
The Bureau of Internal Revenue (BIR) has released Revenue Regulation No. 8-2018 (RR 2018) which details the implementing guidelines governing the Income Tax provisions of the TRAIN tax reform bill recently signed into law by Pres. Rodrigo Duterte.
Although RR 8-2018 was dated January 25, 2018, the complete guidelines was only released to the public, via the official BIR website and Manila Bulletin publication, on February 22, 2018. Still, circulars and memorandum orders issued by the BIR earlier this year mandated the implementation of the TRAIN provisions and tax rates beginning January 1, 2018. BIR Revenue Regulations No. 8-2018 Implementing the Income Tax Provisions of Republic Act No. 10963, Otherwise Known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” Act SECTION 1. SCOPE. – Pursuant to Section 244 of the National Internal Revenue Code, as amended, and Section 84 of Repubiic Act (R.A.) No. 10963 otherwise known as the “Tax Reform for Acceleration and Inclusion (TRAIN)” Law, these regulations are hereby promulgated to implement the amended provisions on Title II – Tax on Income of the NIRC. SECTION 2. DEFINITION OF TERMS. – Words and/or phrases used under these regulations shall mean: a. Compensation Income – in general, means all remuneration for services performed by an employee for his employer under an employer-employee relationship, unless specifically excluded by the Code. The name by which the remuneration for services is designated is immaterial. Thus, salaries, wages, emoluments and honoraria, allowances, commissions (e.g. transportation, representation, entertainment and the like); fees including director’s fees, if the director is, at the same time, an employee of the employer/corporation; taxable bonuses and fringe benefits, except those which are subject to the fringe benefits tax under Sec. 33 of the Code and the allowable “de minimis” benefits; taxable pensions and retirement pay; and other income of a similar nature constitute compensation income. b. Compensation Income Earners – individuals whose source of income is purely derived from an employer-employee relationship. c. Employee – an individual performing services under an employer-employee relationship. The term covers all employees, including officers and employees, whether elected or appointed, of the Government of the Philippines, or any political subdivision thereof or any agency or instrumentality. d. Employer – any person for whom an individual performs or performed any service, of whatever nature, under an employer-employee relationship. It is not necessary that services be continuing at the time the wages are paid in order that the status employer may exist. Thus, for purposes of withholding, a person for whom an individual has performed past services and from whom he is still receiving compensation is an “employer”. e. Employer and Employee Relationship – exists when a person for whom services were performed (employer) has the right to control and direct an individual who performs the services (employee), not only as to the result of the work to be accomplished but also as to the detail, methods and means by which it is accomplished. An employee is subject to the control of the employer not only as to what shall be done, but how it shall be done. It is not necessary that the employer actually exercises the right to direct or control the manner in which the services are performed. It is sufficient that there exists a right to control the manner of doing the work. f. Fringe Benefits – means any good, service or other benefit furnished or granted in cash or in kind other than the basic compensation, by an employer to an individual employee (except rank and file employee as defined herein) such as, but not limited to the following:
h. Gross Sales – refers to the total sales transactions net of VAT, if applicable, reported during the period, without any other deduction. However, gross sales subject to the 8% income tax rate option shall be net of the following deductions:
j. Mixed Income Earner – an individual earning compensation income from employment, and income from business, practice of profession and/or other sources aside from employment. k. Non-resident alien engaged in trade and business (NRAETB) – refers to a non-resident alien who shall come to the Philippines and stay for an aggregate period of more than one hundred eighty (i80) days during any calendar year. l. Non-resident alien not engaged in trade and business (NRANETB) – refers to a nonresident alien who shall come to the Philippines and stay for an aggregate period of one hundred eighty (180) days or less during any calendar year. m. Rank and File Employee – refers to an employee holding neither managerial nor supervisory position as defined under existing provisions of the Labor Code of the Philippines, as amended. n. Self-employed – a sole proprietor or an independent contractor who reports income earned from self-employment. S/he controls who s/he works for, how the work is done and when it is done. It includes those hired under a contract of service or job order, and professionals whose income is derived purely from the practice of profession and not under an employer-employee relationship. Professional – a person formally certified by a professional body belonging to a specific profession by virtue of having completed a required examination or course of studies and/or practice, whose competence can usually be measured against an established set of standards. It also refers to a person who engages in some art or sport for money, as a means of livelihood, rather than as a hobby. It includes, but is not limited, to doctors, lawyers, engineers, architects, CPAs, professional entertainers, artists, professional athletes, directors, producers, insurance agents, insurance adjusters, management and technical consultants, bookkeeping agents, and other recipients of professional, promotional and talent fees. o. Taxable Income – refers to the pertinent items of gross income specified in the Code, less deductions, if any, authorized for such types of income by the Code or other special laws. p. VAT Threshold – refers to the ceiling fixed by law to determine VAT registrable taxpayers. The VAT threshold is currently set at three million pesos (P3,000,000.00). and the same shall be used to determine the income tax liability of self-employed individuals and/or professionals under Sections 24(A)(2)(b) and 24(A)(2)(c)(2) of the Tax Code, as amended. SECTION 3. INDIVIDUAL CITIZEN AND INDIVIDUAL RESIDENT ALIEN OF THE PHILIPPINES. – In general, the income tax on the individual’s taxable income shall be computed based on the following schedules as provided under Sec. 24(A)(2)(a) of the Tax Code, as amended: (A) Income Tax Rates Effective January 1, 2018 until December 31, 2022: RANGE OF TAXABLE INCOME TAX DUE = A + (B X C) Over Not Over Basic Amount (a) Additional Rate (b) Of Excess Rate (c) - P250,000 - - P250,000 P400,000 - 20% P250,000 P400,000 P800,000 P30,000 25% P400,000 P800,000 P2,000,000 P130,000 30% P800,000 P2,000,000 P8,000,000 P490,000 32% P2,000,000 P8,000,000 - P2,410,000 35% P8,000,000 Effective January 1,2023 and onwards: RANGE OF TAXABLE INCOME TAX DUE = A + (B X C) Over Not Over Basic Amount (a) Additional Rate (b) Of Excess Rate (c) - P250,000 - - P250,000 P400,000 - 15% P250,000 P400,000 P800,000 P22,500 20% P400,000 P800,000 P2,000,000 P102,500 25% P800,000 P2,000,000 P8,000,000 P402,500 30% P2,000,000 P8,000,000 - P2,202,500 35% P8,000,000 (B) Individuals Earning Purely Compensation Income lndividuals earning purely compensation income shall be taxed based on the income tax rates prescribed under subsection (A) here. Taxable income for compensation earners is the gross compensation income less nontaxable income/benefits such as but not limited to the Thirteenth (13th) month pay and other benefits (subject to limitations, see Section 6(G)(e) of these Regulations), de minimis benefits, and employee’s share in the SSS, GSIS, PHIC, Pag-ibig contributions and union dues. Husband and wife shall compute their individual income tax separately based on their respective taxable income; if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income. Minimum wage earners shall be exempt from the payment of income tax based on their statutory minimum wage rates. The holiday pay, overtime pay, night shift differential pay and hazard pay received by such earner are likewise exempt. (C) Self-Employed Individuals Earning Income Purely from Self-Employment or Practice of Profession Individuals earning income purely from self-employment and/or practice of profession whose gross sales/receipts and other non-operating income does not exceed the value-added tax (VAT) threshold as provided under Section 109 (BB) of the Tax Code, as amended, shall have the option to avail of:
Unless the taxpayer signifies the intention to elect the 8% income tax rate in the 1st Quarter Percentage and/or Income Tax Return, or on the initial quarter return of the taxable year after the commencement of a new business/practice of profession, the taxpayer shall be considered as having availed of the graduated rates under Section 24(A)(2)(a) of the Tax Code, as amended. Such election shall be irrevocable and no amendment of option shall be made for the said taxable year. The option to be taxed at 8% income tax rate is not available to a VAT-registered taxpayer, regardless of the amount of gross sales/receipts, and to a taxpayer who is subject to Other Percentage Taxes under Title V of the Tax Code, as amended, except those subject under Section 116 of the same Title. Likewise, partners of a General Professional Partnership (GPP) by virtue of their distributive share from GPP which is already net of cost and expenses cannot avail of the 8% income tax rate option. A taxpayer who signifies the intention to avail of the 8% income tax rate option, and is conclusively qualified for said option at the end of the taxable year [annual gross sales/receipts and other non-operating income did not exceed the VAT threshold (P3,000,000.00)] shall compute the final annual income tax due based on the actual annual gross sales/receipts and other non-operating income. The said income tax due shall be in lieu of the graduated rates of income tax and the percentage tax under Sec. 116 of the Tax Code, as amended. The Financial Statements (FS) is not required to be attached in filing the final income tax return. However, existing rules and regulations on bookkeeping and invoicing/receipting shall still apply. A taxpayer shall automatically be subject to the graduated rates under Section 24(A)(2)(a) of the Tax Code, as amended, even if the flat 8% income tax rate option is initially selected, when taxpayer’s gross sales/receipts and other non operating income exceeded the VAT threshold during the taxable year. In such case, his income tax shall be computed under the graduated income tax rates and shall be allowed a tax credit for the previous quarter/s income tax payment/s under the 8% income tax rate option. In addition, a taxpayer subject to the graduated income tax rates (either selected this as the income tax regime, or failed to signify chosen intention or failed to qualify to be taxed at the 8% income tax rate) is also subject to the applicable business tax, if any, subject to the provisions of Section 8 of these Regulations, an FS shall be required as an attachment to the annual income tax return even if the gross sales/receipts and other non-operating income is less than the VAT threshold. However, the annual income tax return of a taxpayer with gross sales/receipts and other non-operating income of more than the said VAT threshold shall be accompanied by an audited FS. Taxable income for individuals earning income from self-employment/practice of profession shall be the net income, if taxpayer opted to be taxed at graduated rates or has failed to signify the chosen option. However, if the option availed is the 8% income tax rate, the taxable base is the gross sales/receipts and other non-operating income. (D) Individuals Earning Income Both from Compensation and from Self-Employment (business or practice of profession) For mixed income earners, the income tax rates applicable are: 1. The compensation income shall be subject to the tax rates prescribed under Section 24(A)(2)(a) of the Tax Code, as amended; AND 2. The income from business or practice of profession shall be subject to the following: a. lf the gross sales/receipts and other non-operating income do not exceed the VAT threshold, the individual has the option to be taxed at:
The provision under Section 24(A)(2)(b) of the Tax Code, as amended, which allows an option of 8% income tax rate on gross sales/receipts and other non-operating income in excess of P250,000.00 is available only to purely self-employed individuals and/or professionals. The P250,000.00 mentioned is not applicable to mixed-income earners since it is already incorporated in the first tier of the graduated income tax rates applicable to compensation income. Under the said graduated rates, the excess of the P250,000.00 over the actual taxable compensation income is not deductible against the taxable income from business/practice of profession under the 8% income tax rate option. The total tax due shall be the sum of:
Mixed income earner who opted to be taxed under the graduated income tax rates for income from business/practice of profession, shall combine the taxable income from both compensation and business/practice of profession in computing for the total taxable income and consequently, the income tax due. Source: Bureau of Internal Revenue (BIR www.bir.gov.ph), Department of Finance (DOF www.dof.gov.ph) Philippines
BIR Form 1701 AIF - Account Information Form for Self-Employed Individuals, Estates and Trusts (Including those with Mixed Income, i.e., Compensation Income and Income from Business and/or Practice of Profession) and Estates and Trusts (Engaged in Trade or Business)
NOTE: Pursuant to Sec. 71 of RA 10963, otherwise known as Tax Reform Acceleration and Inclusion Act, amending Sec. 232 of the Tax Code, as amended, in relation to Revenue Memorandum Circular No. 6 – 2001, corporations, companies or persons whose gross annual sales, earnings, receipts or output exceed P3,000,000 may not accomplish this form. In lieu thereof, they may file their annual income tax returns accompanied by balance sheets, profit and loss statement, schedules listing income-producing properties and the corresponding income therefrom, and other relevant statements duly certified by an independent CPA. Documentary Requirements None Procedures
Same deadline as BIR Form 1701 - On or before the 15th day of April of each year covering taxable income for calendar year 2018 and thereafter
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An act amending Sections 5, 6, 24, 25, 27, 31, 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100,101,106,107,108,109,110,112,114,116,127,128,129,145,148,149,151,155,171,174,175,177,178,179,180,181,182,183,186,188,189,190,191,192,193,194,195,196,197,232,236,237,249,254,264,269,and288;creating new Sections 51-A,148-A,150-A,150-B,237-A ,264-A,264-B, and 265-A; and repealing sections35,62,and 89; All under Republic Act No.8424, otherwise known as the National Internal Revenue Code of 1997, as amended and for other purposes.
Section 1. Title. This act shall be known as the Tax Reform for Acceleration and Inclusion (TRAIN) Section 2. Declaration of Policy. It is hereby declared the policy of the State. a. to enhance the progressivity of the tax system through the rationalization of the of the Philippine internal revenue tax system, thereby promoting sustainable and inclusive economic growth; b. to provide, as much as possible, an equitable relief to a greater number of taxpayers and their families in order to improve levels of disposable income and increase economic activity; and c. to ensure that the government is able to provide for the needs of those under its jurisdiction and care through the provision of better infrastructure, health, education, jobs, and social protection for the people. Section 3. Section 5 of the National Internal Revenue Code of 1997(NIRC), as amended, is hereby further amended to read as follows:
Section 5. Power of the Commissioner to Obtain Information, and to Summon, Examine, and Take Testimony of Persons. In ascertaining the correctness of any return, or in making a return when none has been made, or in determining the liability of any person for any internal revenue tax, or in collecting any such liability, or in evaluating tax compliance, the Commissioner is authorized:
A. xxx B. to obtain on a regular basis from any person other than the person whose internal revenue tax liability is subject to audit or investigation, or form any office or officer of the national and local governments, governmental agencies and instrumentalities, including the Bangko Sentral ng Pilipinas and government -owned or controlled corporations, any information such as but not limited to cost and volume of production, receipts or sales and gross incomes of taxpayers, and the names, addresses, and financial statements of corporations, mutual fund companies, insurance companies, regional operating headquarters of multinational companies, joint accounts, associations, joint ventures or consortia and registered partnerships and their members; Provided, That the Cooperative Development Authority shall submit to the Bureau a tax incentive report, which shall include information on the income tax, value-added tax, and other tax incentives availed of by the cooperatives registered and enjoying incentives under Republic Act No 6938, as amended. Provided further, That the information submitted by the Cooperative Development Authority to the Bureau shall be submitted to the Department of Finance and shall be included in the database created under Republic Act No. 10708, otherwise known as "The Tax Incentives Management and Transparency Act (TIMTA) XXXX Section 4. Section 6 of the NIRC, as amended, is hereby further amended to read as follows:
Section 6. Power of the Commissioner to Make Assessments and Prescribe Additional Requirements for Tax Administration and Enforcement.
A. Examination of Returns and Determination of Tax Due. After a return has been filed as required under the provisions of this Code, the Commissioner or his duly authorized representative may authorize the examination of any taxpayer and the assessment of the correct amount of tax, notwithstanding any law requiring the prior authorization of any government agency or instrumentality: Provided, however, That failure to file a return shall not prevent the Commissioner from authorizing the examination of any taxpayer. XXX XXX B. XXXX C. XXXX D. XXXX E. Authority of the Commissioner to Prescribe Real Property Values.-The Commissioner is hereby authorized to divide the Philippines into different zones or areas and shall, upon mandatory consultation with competent appraisers both from the private and public sectors, and with prior notice to affected taxpayers, determine the fair market value of real properties located in each zone or area, subject to automatic adjustment once ever three (3) years through rules and regulations issued by the Secretary of Finance base on the current Philippine valuation standards: Provided, That no adjustment in zonal valuation shall be valid unless published in a newspaper of general circulation in the province, city or municipality concerned, or in the absence thereof, shall be posted in the provincial capitol, city or municipal hall and in two(2) other conspicuous public places therein: Provided, further, That the basis of any valuation, including the records of consultations done, shall be public records open to the injury of any taxpayer. For purposes of computing any internal revenue tax, the value of the property shall be, whichever is the higher of: 1. the fair market value as determined by the Commissioner, or 2. the fair market value as shown in the schedule of values of the Provincial and City Assessors Section 5. Section 24 of the NIRC, as amended, is hereby further amended to read as follows: Section 24. Income Tax Rates A. Rates of Income Tax on Individual Citizen and Individual Resident Alien on the Philippines 1. An income tax is hereby imposed: a. on the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections B, C, and D of this Section, derived for each taxable year from all sources within and without the Philippines by every individual citizen of the Philippines residing therein; b. on the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections B, C, and D of the Section, derived for each taxable year from all sources within the Philippines by an individual citizen of the Philippines who is residing outside of the Philippines including overseas contract workers referred to in Subsection C of Section 23 hereof; and c. on the taxable income defined in Section 31 of this Code, other than income subject to tax under Subsections B, C, and D of this Section, derived for each taxable year from all sources within the Philippines by an individual alien who is a resident of the Philippines. 2. Rates of Tax on Taxable Income of Individuals - The tax shall be computed in accordance with and at the rates established in the following schedule: a. Tax Schedule Effective January 1, 2018 until December 31, 2022 Not over 250,000.00 = 0% Over 250,000.00 but not over 400,000.00 = 20% of the excess over 250,000.00 Over 400,000.00 but not over 800,000.00 = 30,000.00 + 30% of the excess over 400,000.00 Over 800,000.00 but not over 2,000,000.00 = 130,000.00 + 30% of the excess over 800,000.00 Over 2,000,000.00 but not over 8,000,000.00 = 490,000.00 + 32% of the excess over 2,000,000.00 Over 8,000,000.00 = 2,410,000.00 + 35% of the excess over 8,00,000.00 Tax Schedule Effective January 1, 2023 and onwards: Not over 250,000.00 = 0% Over 250,000.00 but not over 400,000.00 = 15% of the excess over 250,000.00 Over 400,000.00 but not over 800,000.00 = 22,500.00 + 20% of the excess over 400,000.00 Over 800,000.00 but not over 2,000,000.00 = 102,500.00 + 25% of the excess over 800,000.00 Over 2,000,000.00 but not over 8,000,000.00 = 402,500.00 + 30% of the excess over 2,000,000.00 Over 8,000,000.00 = 2,202,500.00 + 35% of the excess over 8,00,000.00 For married individuals, the husband and wife, subject to the provision of Section 51(D) hereof, shall compute separately their individual income tax based on their respective total taxable income: Provided, That if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income. Provided, that minimum wage earners as defined in Section 22(HH) of this code shall be exempt from the payment of income tax on their taxable income: Provided, further, That the holiday pay, overtime pay, night shift differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax. b. Rate of tax on Income of Purely Self-employed Individuals and/or Professionals Source: Republic Act No. 10963 - Republic of the Philipppines, Congress of the Philipppines, Metro Manila, Seventeenth Congress, Second Regular Session.
Rates of Tax on Taxable Income of Individuals - The tax shall be computed in accordance with and at the rates established in the following schedule:
Tax Schedule Effective January 1, 2018 until December 31, 2022 Not over 250,000.00 = 0% Over 250,000.00 but not over 400,000.00 = 20% of the excess over 250,000.00 Over 400,000.00 but not over 800,000.00 = 30,000.00 + 30% of the excess over 400,000.00 Over 800,000.00 but not over 2,000,000.00 = 130,000.00 + 30% of the excess over 800,000.00 Over 2,000,000.00 but not over 8,000,000.00 = 490,000.00 + 32% of the excess over 2,000,000.00 Over 8,000,000.00 = 2,410,000.00 + 35% of the excess over 8,00,000.00 Tax Schedule Effective January 1, 2023 and onwards: Not over 250,000.00 = 0% Over 250,000.00 but not over 400,000.00 = 15% of the excess over 250,000.00 Over 400,000.00 but not over 800,000.00 = 22,500.00 + 20% of the excess over 400,000.00 Over 800,000.00 but not over 2,000,000.00 = 102,500.00 + 25% of the excess over 800,000.00 Over 2,000,000.00 but not over 8,000,000.00 = 402,500.00 + 30% of the excess over 2,000,000.00 Over 8,000,000.00 = 2,202,500.00 + 35% of the excess over 8,00,000.00 For married individuals, the husband and wife, subject to the provision of Section 51(D) hereof, shall compute separately their individual income tax based on their respective total taxable income: Provided, That if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income. Provided, that minimum wage earners as defined in Section 22(HH) of this code shall be exempt from the payment of income tax on their taxable income: Provided, further, That the holiday pay, overtime pay, night shift differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax. Source: Republic Act No. 10963 - Republic of the Philipppines, Congress of the Philipppines, Metro Manila, Seventeenth Congress, Second Regular Session.
The Philippine Stock Exchange Inc. is the national stock exchange of the Philippines. The Philippine Stock Exchange (PSE) is the corporation that governs Philippine local stock market. Listed are name of corporation where you can invest, indicated are the names, par value of the stocks and 52 weeks high and low price.
BANKS and OTHER FINANCIAL INSTITUTION STOCKS ASIA UNITED BANK PAR VALUE: 10.00 HIGH : 60.00 LOW: 45.60 BDO UNIBANK INC PAR VALUE:10.00 HIGH: 149.00 LOW: 103.40 BANK OF PHILIPPINE ISLANDS PAR VALUE: 10.00 HIGH: 108.50 LOW: 85.50 CHINABANK PAR VALUE: 10.00 HIGH: 41.60 LOW: 33.00 EAST WEST BANK PAR VALUE: 10.00 HIGH: 35.15 LOW: 18.32 METROBANK PAR VALUE: 20.00 HIGH:96.50 LOW: 69.00 PB BANK PAR VALUE: 10.00 HIGH: 16.36 LOW: 12.00 PB COM PAR VALUE:100.00 HIGH: 26.50 LOW:21.20 PHILIPPINE NATIONAL BANK PAR VALUE:40.00 HIGH:71.00 LOW:53.00 PHILTRUST BANK PAR VALUE:10.00 HIGH:153.90 LOW:100.00 RCBC PAR VALUE:10.00 HIGH:66.00 LOW:33.50 SECURITY BANK PAR VALUE:10.00 HIGH:268.20 LOW:180.40 UNION BANK PAR VALUE:10.00 HIGH:87.20 LOW:72.00 OTHER FINANCIAL INSTITUTION
AG FINANCE
PAR VALUE: 1.00 HIGH: 5.90 LOW: 3.00 BRIGHT KINDLE PAR VALUE: 0.55 HIGH: 3.24 LOW: 1.05 BDO LEASING PAR VALUE: 1.00 HIGH: 4.50 LOW: 3.51 COL FINANCIAL PAR VALUE: 1.00 HIGH: 18.60 LOW: 15.00 FIRST ABACUS PAR VALUE: 1.00 HIGH: 0.82 LOW: 0.63 FILIPINO FUND PAR VALUE: 1.00 HIGH: 10.30 LOW: 6.55 IREMIT PAR VALUE: 1.00 HIGH: 1.92 LOW: 1.60 MEDCO HOLDING PAR VALUE: 1.00 HIGH: 0.87 LOW: 0.55 NTL REINSURANCE PAR VALUE: 1.00 HIGH: 1.29 LOW: 0.70 PHIL STOCK EXCHANGE PAR VALUE: 1.00 HIGH: 265.00 LOW: 228.00
In the formal recording of business transactions and events, it is customary to provide a guide to the accounting assistant or bookkeeper. A chart of account is prepared for the use of accounting staffs. As the accountant prepares two main accounting report, the balance sheet and income statements or statement of business operations then the accounts should be classified in the chart according to the statements wherein they appear. Thus, there are balance sheet accounts and profit and loss accounts.
In preparation of a chart of accounts covers the following: determination of what specific accounts are required and selection of appropriate and descriptive titles for the accounts. The specific accounts required will depend on the nature of the business. The nature of the business will give an indication of the transactions to be undertaken. After the determination of what accounts are to be used, then the next step will be selection of titles descriptive enough to convey the nature of the account. Asset titles - examples are cash, accounts receivable, notes receivable, merchandise, supplies on hand, marketable securities, land, buildings, equipment, furniture and fixtures, office equipment and etc. Liability titles - examples are accounts payable, notes payable, taxes payable, bonds payable and etc. Proprietorship titles - examples are Owner's capital or equities, owner's drawing etc. Income titles - examples are sales, revenue, fees, rent income, service income, interest income and etc. Deduction from income titles - examples are cost of sales of cost of goods sold, salaries, supplies, insurance, taxes, utilities, repairs, and etc. The Journal - it is the accounting book wherein the business transactions are recorded for the first time. It is also called the book of original entry. There are various kinds of journal books some are cash journal, sales journal, purchases journal, and the general journal. The number of journals to be used in every business is dictated by the size and needs of the business.
The Journal
-the journal is the accounting book wherein the business transactions are recorded for the first time ; it is also called the book of original entry. Advantages of the Journal -a complete record of transactions is provide in one place. -a chronological order of transactions and events is provided in one book -the explanation given to each entry in the journal permits the omission of repetitive explanation in the ledger -the use of the journal affords an easy check on the proper implementation of the rules of debit and credit -the journal facilitates the discovery of errors The Ledger -since transactions are recorded in the journal according to their dates of occurrence, items of similar nature are not grouped together. Information in the general journal is spread amount various transactions recorded. The transaction recorded in the journal are group into one account. A group of accounts constitute a ledger. Relationship between the journal and the ledger -information in the journal is grouped according to transactions while in the ledger, by accounts -information recorded in the ledger always comes from the journal -the journal is a book of original entry while the ledger is a book of final entry the two records are cross-referenced to each other by the use of the folio columns What is posting? -It is the process of transferring to the ledger the same information recorded in the journal. Debit entries in the journal are transferred to the debit side of the pertinent account in the ledger and credit entries in the journal are transferred to the credit side of the proper account in the ledger.
What is IRS form 1099?
IRS form 1099 reports income from self employment earnings, interest and dividends, government payments, and more. Form 1099 is a series of documents the Internal Revenue Service refers to as information returns. Form 1099 have different forms that report the various types of income a tax payer may receive throughout the year other than the salary the employer pays. If you are a worker earning a salary or wage, your employer reports annual earnings at year-end on Form W-2. However, for those earnings as a self-employed or independent contractor , freelancer etc. you will receive Form 1099 MISC from each of your client. When you own a stock investments of mutual funds, you will receive Form1099-DIV to report the dividends and other distributions that taxpayer receive during the year. For other investment that receive interest like cash in banks you will receive Form 1099-INT. Commonly it was receive from banks where you maintain your savings account. All modern accounting systems make use of the double entry bookkeeping method. The double entry bookkeeping method is based on the nature of a transaction. As there are two values involved in a transaction there should be also be two parts for the recording of a transaction, a left side and a right ride(debit/credit). The Accounting Equation The basic accounting equation is : ASSETS = EQUITIES What is Assets? It includes anything owned or possessed by the business which is capable of being expressed in terms of money or possessing monetary values, and which consequently, is available for the payment of the debts or obligations of the business. What is Equities? It includes all the vested rights of persons in the assets of the business. Equities include all the amounts owned by the business to all persons which may be classified as : liabilities and owners' equty To update our accounting equation, we may say that : ASSETS = LIABILITIES + PROPRIETORSHIP or ASSETS - LIABILITEIS = PROPRIETORSHIP
To summarize the equation we may concludes that:
-Increase in Assets = Increase in Proprietorship -Increase in Assets = Increase in Liabilities -Increase in some forms of Assets = Decrease in other forms of Assets - Decrease in Assets = Decrease in Proprietorship -Decrease in Assets = Decrease in Liabilities -Increase in Liabilities = Decrease in Proprietorship - Increase in some form of Liabilities = Decrease in other forms of Liabilities - Increase in Proprietorship = Decrease in Liabilities - Increase in some forms of Proprietorship = Decrease in other forms of Proprietorship What other factors affect Proprietorship? Let us decompose the Proprietorship section of the accounting equation into the following parts: - Capital originally invested of amount originally placed into the business - Additional investment or amount added to the capital originally invested (increase capital) - Withdrawal or taking away of capital from business (decrease capital) - Incomes or earnings of the business (sale of merchandise or services) - Deductions from income such as cost of merchandise bought and sold, expenses, losses incident to the operations of the business. From the original equation of Assets = Liabilities + Proprietorship we may expand our equation into Assets = Liabilities + Original capital + Additional investment - Withdrawals +Income- Deductions from Income
Accounting is a service activity and has been called "language of business". Accounting terms and concepts are used in statements and reports submitted to interested users - the owners, investors, creditors, government, and business analysts.
Accounting is an art of recording, classifying, summarizing in a significant manner and in terms of money, transactions, and events which are in part, at least, of a financial character, and interpreting the results thereof. Recording This function deals with the writing on the books or records of the business transactions or events. This is technically referred to as Bookkeeping. Bookkeeping is defined as the systematic and chronological recording of business transactions or events. Classifying In the recording and summarizing functions, similar items are grouped or sorted under the same names. In the preparation of accounting reports, items maybe arranged according to their liquidity or permanent nature or whether items are operating of non-operating. Summarizing Periodically, usually yearly, or sometimes monthly, quarterly, owners of business require of the accountant information regarding the status of the business. The accountant groups and summarizes the details of the data in the accounting records. Interpreting Reports and statements prepared and submitted by the accountant are interpreted for the guidance of management. The accountant prepares additional explanations, notes, analysis and the like. BUSINESS ORGANIZATION The accountant often meets three types of business organizations, namely: Sole or Single Proprietorship This is the simplest form of business as it is exclusively owned by only one individual. The owner acts as the active manager. He may supply all the capital from his personal funds or from funds borrowed from other parties. For accounting purposes, it is advisable to maintain separate records from the business and from those of the owner's personal affairs. Partnership This is the business organization owned jointly by two or more persons. All the owners agree as to their capital contributions, divisions of the business profits and losses, and other incidents matters. According to Partnership Law, if the partnership is formed it acquires a legal personality distinct and separate from the owners. Corporation This is an organization of not less than five persons, whose capital is divided into shares of stock. It is a legal personality distinct and separate from the stockholders. As corporation it has the following advantages from other types of business organizations: limited liability of stockholders, greater source of capital, and longer period of existence.
The Professional Regulation Commission (PRC) announces that 4,511 out of 14,816 passed the Certified Public Accountant Licensure Examination given by the Board of Accountancy in the cities of Manila, Baguio, Cagayan De Oro, Cebu, Davao, Iloilo, Legazpi Lucena, Tacloban and Tuguegarao last October 2017. The results of examination with respect to three (3) examinees were withheld pending final determination of their liabilities under the rules and regulations governing licensure examination. The successful examinees who garnered the ten (10) highest places in the October 2017 Certified Public Accountant Licensure Examination are the following: RANK NAME SCHOOL RATING(%) 1. ALFONSO SOLOMON RAMOS MAGNO UNIVERSITY OF SANTO TOMAS 91.33 2. JUDY ANN MALATE TUZON UNIVERSITY OF THE EAST-MANILA 91.17 3. CARL LOUISE GARCIA CHAN UNIVERSITY OF THE PHILIPPINESDILIMAN 91.00 4. RONALD MANDAC BOLAÑOS JR POLYTECHNIC UNIVERSITY OF THE PHILIPPINES-MAIN-STA. MESA 90.67 RAY JAY MENDEZ DIZON UNIVERSITY OF SANTO TOMAS 90.67 5. JOHN LESTER HERAMIS ARATEA UNIVERSITY OF THE PHILIPPINESDILIMAN 90.33 6. KNEERIZZA NECA CASADOR EMBRADO ATENEO DE DAVAO UNIVERSITY 90.17 7. ALVIN THOMAS LAZARO ENDAYA UNIVERSITY OF SANTO TOMAS 90.00 8. URIAH ROSARIO DIAZ UNIVERSITY OF THE EAST-MANILA 89.83 PAULINE ERIKA ALAJAN OCAMPO MINDANAO STATE UNIVERSITY-ILIGAN INSTITUTE OF TECHNOLOGY 89.83 9. ROCHELLE SANTOS ENRILE FAR EASTERN UNIVERSITY-MANILA 89.67 MARIA ISABEL CORDON MARFIL UNIVERSITY OF SANTO TOMAS 89.67 ANGEL MAE LAGLEVA REYES FAR EASTERN UNIVERSITY-MANILA 89.67 VANNESSA CRITICA ROXAS FAR EASTERN UNIVERSITY-MANILA 89.67 MARC LEUVILL DAYO VILLAVERDE UNIVERSITY OF SANTO TOMAS 89.67 10. LOUIZE ALLAINE TISMO AREÑO UNIVERSITY OF SANTO TOMAS 89.33 MARCIA PILAPIL BUTASTAS UNIVERSITY OF SAN CARLOS 89.33 CHRISTINE MAE BAGOBE DE LEON UNIVERSITY OF SANTO TOMAS 89.33 For the complete list of successful passers you may visit : www.prc.gov.ph
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What are stocks?
Stocks are shares of ownership in a corporation. The stock market is a place where stocks are bought and sold. The Philippine Stock Exchange (PSE) is the corporation that governs our local stock market. People buy or invest in stocks to benefit from a company's tremendous value potential over time. Once you buy or invest into a stock you now become part owner or a shareholder of that particular corporation. How to make money in stocks? As a Shareholder, you can now participate in the company's growth and success through stock Price Appreciation and by earnings Dividends.Capital or price appreciation is an increase in the market price of your stock over time brought about by an increase in its potential value and the demand to buy its shares. The faster a company can grow, the faster its price can appreciate. Profitable corporations can also issue dividends, whether in cash or in additional shares of stock as a means for shareholders to share in their distributed profits. Why Invest in the Stock Market? History has proven that investing in quality stocks can provide greater returns than most investment instruments. This offers you the best chance in achieving your financial goals and gives you the ability to later enjoy the benefits of your money working for you. The track record of the stock market also shows that a good basket of stocks climb more often than decline - reducing risk over the long-term. Another reason why stocks can outperform other asset classes is because it can compound the value of your investment. Companies can reinvest the profits they make to generate even more profit. Moreover any dividends you receive can also be used to buy more shares and thereby enlarging your overall value as well. If you are interested in stock investing you may visit Philippine Stock Exchange Inc. website https:// www.pse.com.ph or COL Financial Philippines at https://www.colfinancial.com. 
Here are a simple guide on opening of new business for new entrepreneur to consider:
- identify what form of business you like to open (single proprietorship, partnership, corporation, cooperative) -decide on the company or business name -register with DTI(single proprietorship), SEC(partnership or corporation) or CDA( cooperatives). -register with the barangay, city or municipality, BIR and other government agencies (SSS,Philhealth,HMDF etc) -print and register reciepts for your business -start operations
Businesses to be considered as legitimate should be registered with the appropriate government agency. The government has the right to close your business in the cities or municipalities where you are operating. After deciding what type of business you want to open, you should register it with the proper agency of our government.
-Department of Trade and Industry (DTI) -Securities and Exchange Commission (SEC) -Cooperative Development Authority (CDA) -Social Security System (SSS) -Philhealth -Home Development and Mutual Fund (HDMF) -Local Government (Barangay, Municipal, CityHall) -Bureau of Internal Revenue (BIR)
There are four types of business enterprises that anyone can choose from. These are sole proprietorship, partnership, corporation and cooperative.
Sole proprietorship is a kind of business solely owned by and individual. It is the easiest to organize yet the most dangerous since your creditor like banks can run after all your personal properties should anything go wrong. Partnership is a kind of business owned by two or more partners. It could be a professional of general partnership. Professional partnership involves the practice of one's profession like doctors, lawyers , engineers and etc. General partnership involves any kind of business other than practice of professions. Corporation is a kind of business by a minimum of five incorporators and stockholders. Business is run by an officers of the corporation. It is governed by the corporation code of the Philippines and registered to the SEC. Cooperative is a kind of business owned by a minimum of fifteen individuals. Members vote for the officers of the cooperative. It can have as many members as possible. It should be registered to CDA. |
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