Book and Records
Accounting is a language that communicates economic information to people having interest in an organisation. All entrepreneurs are obliged to keep books and records in order to determine the taxable profit and to provide creditors with information on a firm's ability to meet its financial obligations. Management and cost accounting is not a must, but the information is useful in decision-taking and control activities.
For tax purposes, three different methods can be used for profit determination:
Double Entry Accounting
Sec. 4 (1) and Sec. 5 ITA
Balance sheet, recording of expenses and receipts on the accrual basis, cash book, recording and valuation of inventories, accounts receivables etc.Cash Accounting
Sec. 4 (3) ITA
Recording of receipts and expenses on the cash basis, fixed-asset register, purchase book and wage accounts.Lump Sum Taxation
Sec. 17 ITA
Different types of lump sum taxation possible; recording of receipts is in most cases required.