Diary book

Concept

The journal is the book where all the economic operations that occur in a company on
a daily basis are recorded, always following a chronological order.

It is called a journal: “that document where all operations related to the company's
activity are reflected day by day” (Javier Valencia, journal, https://economipedia.com)

The main function of the journal is to keep track of the economic operations that
occur in the company.

Each journal entry is called an accounting entry and each accounting entry will imply
a modification in the company's accounts, whether in the income, expense or equity
accounts.

The method used to record the accounting entries in the journal is the Double Entry
method, where each accounting entry involves at least two accounts, one in the Debit
and another in the Credit, and where the sums of both the debit as credit must match.

To register the accounts according to the double entry rule, we must take into account
that it will be recorded in:

Debit: increases in assets, decreases in liabilities and decreases in equity.

Credit: decreases in assets, increases in liabilities and increases in equity.

The daily book must contain the following parts:

1. Name of the entity: the name of the company is entered.

2. Operation date: entered at the time the transaction was made and must be in
order
3. Description and name of the account: Transactions must specify your name,
the account from which it was debited or deposited, and a short description
indicating what that transaction was established for.
4. Folio number: placed at the top right of the journal
5. Debit and credit: In these columns, you stipulate the debit and credit of the
operations. In this way, the beginning and end of what was paid and debited in
the transactions is clear.
 6. Account code: In this column the relevant code is recorded in the Chart of
Accounts

Journal Functions

 Keep accounts organized chronologically and with consecutive numbering.

 Create the ledger.
 Check the balance sheet

Characteristics

 It is a mandatory book required by the commercial code.

 Because it is mandatory, it must be sealed, numbered and signed by the
commercial court.
 It records the daily operations carried out by the company or organization.
 The operations have the same balance of value.
 It is the essential tool for creating the general ledger.
 All accounts are registered without exception.

Rules that regulate it

Articles 36 and 37 of the Commercial Code clearly mention how to record

transactions in the journal:

So article 36 prohibits the merchant:

 Alter the order and date of the operations described in the entries.
 Leave blank spaces in the body of the seats.
 Record entries in the margin and make interlineations, scratches or amendments.
 Delete the entries or part of them
 Tear off pages, alter the binding or foliation and mutilate any part of the books.
IMPORTANCE:

It is a book that must be carried by every merchant, in addition to being sealed and
presented in the Commercial Registry before being used; It must be a bound, foliated
book and must be completely sealed on all its pages.

The company's operations will be recorded in the journal. All transactions that take
place in a company will be recorded in chronological order; It will be recorded
indicating the name of the accounts to be debited and credited, as well as the amounts of
debits and credits, that is, all accounting operations, before we transfer them to the
different ledger accounts.

Without the journal it would not be possible to correct imbalances and errors,
because the source of information would be missing.

The origin and formulation of the entries would not be known, nor the meaning of
the entries, which is the essence of accounting, because they cannot be recorded.

Nor could a sequence of accounting events be recomposed, much less would there be
information on their origin or the history of the operations to be able to review them, as
an internal or external auditor could also do.

REGISTRATION FORM:

Subjects obliged to keep the Daily Book must consider the following formalities:

Header Data
The Journal must have the following header data:
• Name of the book or record.
• Period and/or year to which the registered information corresponds.
• RUC number of the tax debtor, Surnames and First Names, Denomination and/or
Company Name of the latter.
Notwithstanding the above, in the case of the Daily Book kept manually, it will be
sufficient to include this data in the first page of each period or fiscal year.

Registration of Operations
When registering operations in the Journal, the obligated subject must do the
following:

• In chronological or correlative order, unless a predetermined order is established by

special rule.

• Legibly, without blank spaces or lines, interpolations, amendments or signs of having

been altered.
• Using the General Accounting Plan in force in the country, for which purpose
disaggregated accounting accounts will be used at least to the level of digits established
in said plan, unless a greater disaggregation must be carried out due to the application of
tax regulations.

• Totaling the amounts for each folio, column or accounting account until obtaining the
general total of the taxable period or year, as appropriate. The provisions of this point
are not required for the Daily Book to be kept in single or continuous sheets. In that
case, the totalization will be made at the end of the period.

• Using the phrase “they GO” and “they COME” as appropriate, at the end and
beginning of each page respectively. The provisions of this point are not required for the
Daily Book to be kept in single or continuous sheets.

• If no operations are carried out in a certain period or taxable year, the legend “NO
OPERATIONS” will be recorded in the corresponding folio.
The provisions of this point are not required for the Daily Book to be kept in single or
continuous sheets.

It is important to mention that both the header data and the rules for recording
operations are mandatory as of 01/01/2007.
 In this regard, it is worth remembering that in the case of the Accounting Plan to be
used, until 12/31/2008 the number of digits to be used was governed by the following:

DIGIT LEVEL DETAIL

For tax debtors who in the previous year
THREE (3) DIGITS MINIMUM had obtained gross income up to 100
UIT's.
For tax debtors who in the previous year
FOUR (4) DIGITS MINIMUM had obtained gross income greater than
100 UIT's.

CENTRALIZATION:

Record the centralization entry of the inventory and balance sheet book in the
journal.

The Inventory and Balance book, as we have already learned, is the first accounting
book that is used at the beginning of each accounting period, according to the
accounting cycle.

The next step is to transfer the data from the Inventories and Balances book and
record them in the Journal book, which represents the accounting entry that begins the
operations carried out by a company during the year.

In the event that the company is newly established, the first accounting entry will
record the contribution of the partners but if the company restarts its activities then the
entry that is recorded will have the balances that closed the previous year, made up of
accounts of assets, liabilities and heritage.

An example of each case will be recorded below:

Case 1: Newly formed company.
The commercial company “LET'S GO TO THE WORLD CUP” EIRL, is established
with S/. 15,000 in cash.

Inventory and Balance Book

EXERCISE EXERCISE
ASSET 2014 PASSIVE AND HERITAGE 2014
CURRENT ACTIVE CURRENT LIABILITIES 0

Cash and cash equivalents

cash 15,000 NON-CURRENT LIABILITIES 0
TOTAL CURRENT ASSETS 15,000
TOTAL CURRENT LIABILITIES
CURRENT AND NON-CURRENT 0
NON-CURRENT ASSET 0 TOTAL LIABILITIES 0

TOTAL ASSETS NO
CURRENT 0 NET WORTH
Capital 15,000
TOTAL LIABILITIES AND EQUITY
TOTAL ASSETS 15,000 NET 15,000

Journal – Centralization Entry (Opening)

CODE ACCOUNT NAME HAS TO

TO HAVE
14.4 Shareholders (or partners) subscriptions 15,000
cancellation pending
50.1 Capital 15,000

10.1 Box 15,000

14.4 Shareholders (or partners) subscriptions 15,000

cancellation pending

Case 1: Company that restarts its commercial activities

The commercial company “BANDERAS” SA restarts its activities on January 2

with the following balances:
 Box S/. 3,000
Invoices receivable 1,700
Commodity 2,600
Bills payable 3,000
Capital 4,300

EXERCISE EXERCISE
ASSET 2014 PASSIVE AND HERITAGE 2014

CURRENT ACTIVE CURRENT LIABILITIES

Cash and cash
equivalents 3,000 Trade accounts payable 3,000
Accounts receivable
commercial 1,700 NON-CURRENT LIABILITIES 0
Commodity 2,600
TOTAL CURRENT ASSETS 7,300
TOTAL CURRENT AND NON-
CURRENT LIABILITIES 3,000
NON-CURRENT ASSET TOTAL LIABILITIES 3,000

TOTAL ASSETS NO
CURRENT 0 NET WORTH
Capital 4,300
TOTAL LIABILITIES AND EQUITY
TOTAL ASSETS 7,300 NET 7,300

CODE ACCOUNT NAME HAS TO TO

HAVE
10.1 Box 3,000
12.1 Invoices receivable 1,700
20.1 Commodity 2,600
42.3 Bills payable 3,000
50.1 Capital 4,300

Record of centralization entries of the Purchase Registry.

Commercial transactions require us to prepare accounting entries that allow the

recording of each of them. Due to this, the centralization entries of the purchases and
sales record are recorded in the journal. This means that the number of accounting
entries is minimized and only three to four accounting entries are prepared for each
accounting record (purchases and sales. ).
 An example of the centralization entry of the purchase record in the journal will
be presented below.

CODE ACCOUNT NAME HAS TO HAVE

TO
18.2 Insurance 12,000
18.3 Rentals 3.600
60.11 Manufactured goods 25.600

63.71 Advertising 600

40.11 VAT 7,524
42.1 Invoices, Tickets and Other Receipts to Pay 49,324

20.2 Extraction Merchandise 25,600

94 Administrative Expense 300
95 Sales Expense 300
61.1 Variation of existences 25,600
79 Charges attributable to cost account 600

42.1 Invoices, Tickets and Other Receipts to Pay 21,712

42.3 Bills payable 21,712

As can be seen in the first block of accounts the provision entry is presented, in
the second block the destination entry and in the third the exchange entry for the
total moment of the purchase record.

Registration of sales record centralization entries.

An example of the centralization entry of the sales record in the journal will now
be presented.

CODE ACCOUNT NAME HAS TO TO

HAVE
12.1 Invoices, receipts and other receipts receivable 181,720
 40.11 VAT 27,720
70.1 Merchandise 154,000

12.3 Bills receivable 76,818

12.1 Invoices, receipts and other receipts receivable 76,818

As can be seen in the first block of accounts the provision entry is presented and in
the second block the exchange entry is presented, for the total amount of the sales
record.

Sales record

What is the sales and income record?

It is a mandatory auxiliary book with double foliation and the legalization is done on
the first page.

The sales record is understood to mean: “The sales and income record is an auxiliary
book in which all payment receipts issued by a company are noted in chronological and
correlative order. This registration is a tax requirement.”(David olivares, sales and
income registry, https://www.muypymes.com)

It is important since the sales operations of merchandise, goods or services of a

company are recorded, since its main purpose is to determine the sales made and the
taxes withheld, discounts, interests and also the conditions of sales to our clients.

In this book we determine the income that the company has had in comparative
months and thus verify the variations that have occurred.

Every end of the month it is closed and centralized to the daily book.

The sales record has the following parts:

to date.

b) Client RUC number.

c) Invoice Number, Sales Slip, Debit Note, Credit Note.

d) Name or Company Name of the Client.

e) Foreign Trade Sales: Currency, exchange rate, amount.

f) Amount of the Goods and Services recorded.

g) Amount of discounts and bonuses.

h) Other charges.

i) Amount of Goods and Services not taxed.

j) Amount Taxable base of the Selective Consumption Tax.

k) Rate and Amount of the Selective Consumption Tax.

l) Rate and Amount of the VAT tax base.

m) Rate and amount of the General Sales Tax.

n) Total amount to be collected.

FORMATO 14.1: REGISTRO DE VENTAS E INGRESOS

PERIODO:
RUC:
APELLIDOS Y NOMBRES, DENOMINACIÓN O RAZÓN SOCIAL:

NÚMERO FECHA DE FECHA COMPROBANTE DE PAGO INFORMACIÓN DEL CLIENTE VALOR BASE IMPORTE TOTAL DE LA OPERACIÓN OTROS TRIBUTOS IMPORTE REFERENCIA DEL COMPROBANTE DE PAGO

CORRELATIVO EMISIÓN DEL DE O DOCUMENTO FACTURADO IMPONIBLE EXONERADA O INAFECTA Y CARGOS QUE TOTAL TIPO O DOCUMENTO ORIGINAL QUE SE MODIFICA

DEL REGISTRO O COMPROBANTE VENCIMIENTO N° SERIE O DOCUMENTO DE IDENTIDAD APELLIDOS Y NOMBRES, DE LA DE LA ISC IGV Y/O IPM NO FORMAN PARTE DEL DE N° DEL

CÓDIGO UNICO DE PAGO Y/O PAGO TIPO N° DE SERIE DE LA NÚMERO TIPO NÚMERO DENOMINACIÓN EXPORTACIÓN OPERACIÓN EXONERADA INAFECTA DE LA COMPROBANTE CAMBIO FECHA TIPO SERIE COMPROBANTE

DE LA OPERACIÓN O DOCUMENTO (TABLA 10) MAQUINA REGISTRADORA (TABLA 2) O RAZÓN SOCIAL GRAVADA BASE IMPONIBLE DE PAGO (TABLA 10) DE PAGO O DOCUMENTO

TOTALES

Who is required to keep sales records?

 Firstly, VAT taxpayers, as well as those subject to the general income tax regime and
those who are subject to the special regime, are required to keep the sales record.

General regime:

Third category income recipients whose annual income does not exceed 150 UIT

Special regime:

Natural persons, conjugal partnerships, undivided successions and legal entities

Obligations to legalize

The record of sales and income must be legalized by a notary or legal justice of the
peace, when applicable to the place where the tax domicile of the tax debtor is located.

Legal aspect

For every company or merchant it is mandatory since they are within the general
sales tax, according to article 37 of the TUO of the general sales tax law and selective
consumption tax DS Nº 055-99-EF.

Importance

It is important because it lets us know the sales that are made, since the taxes
obtained allow us to determine tax payments (Accounting Peru 2018)
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