Essential Accounting Records and Financial Statements for Small Businesses

Mandatory Accounting and Tax Books

Required Books for Micro and Small Companies (General Law)

The following books are required for micro and small companies under the General Law:

1. Journal;
2. General Ledger (or "Reason");
3. Inventory Register;
4. Merchandise Entry Register;
5. Services Rendered Register;
6. Services Taken Register;
7. Other registers, for specific cases.

Simplified Chart of Accounts Structure

Consider the Plan of Accounts currently in force:

1. The Chart of Accounts, even simplified, should be prepared taking into account the specific nature, size, and type of activities and operations carried out by micro and small businesses, and in accordance with their information control needs related to fiscal and managerial aspects.
2. The Simplified Chart of Accounts must contain at least four (04) levels.
3. The Simplified Chart of Accounts must include at least the segregation of the following:
   1. Revenue from Sales of Products, Goods, and Services;
   2. Returns of Products, Goods, and Canceled Services;
   3. Cost of Goods Sold;
   4. Cost of Goods Sold;
   5. Cost of Services;
   6. Expenses relating to other expenses required for maintenance of economic activities not included in costs;
   7. Other Operating Income;
   8. Non-operating income; and
   9. Non-Operating Expenditure.

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Balance Sheet Structure (As of DD.MM.YYYY)

Assets

TOTAL ASSETS XXX

Current Assets

• Available Funds (Cash/Bank)
• Accounts Receivable (Short Term)
• Inventory (Stocks)
• Other Credits
• Prepaid Expenses (Next Fiscal Year Expenses)

Non-Current Assets (Long Term)

• Accounts Receivable (Long Term)
• Inventory (Stocks - Long Term)

Permanent Assets

• Investments
• Property, Plant, and Equipment (Immobilized)
• Intangible Assets
• Deferred Assets
• (-) Accumulated Depreciation and Amortization

Liabilities and Equity

TOTAL LIABILITIES AND EQUITY

Current Liabilities

• Social Obligations and Taxes Payable
• Accounts Payable (Short Term)
• Distributable Profits
• Bank Loans (Short Term)

Non-Current Liabilities (Long Term)

• Accounts Payable (Long Term)
• Bank Financing

Deferred Income (Results of Future Periods)

• Deferred Revenue
• (-) Deferred Expenses

Equity

• Capital
• Capital Reserves
• Equity Results
• Profit Reserves
• (-) Treasury Shares
• Profits or Losses for the Period

Income Statement (Statement of Results) Structure

Calculation of Gross Profit

GROSS SALES

• Merchandise Sales
• Product Sales
• Service Sales

(-) DEDUCTIONS

• Taxes on Sales
• Returns
• Rebates

NET REVENUE XXX

(-) COST OF SALES

• Cost of Goods Sold
• Cost of Goods Sold
• Cost of Services

GROSS PROFIT

Operating Results

(-) OPERATING EXPENSES

• Personnel Expenses
• Administrative Expenses
• Selling Expenses
• Tax Expenses (Other than Sales Taxes)
• Depreciation and Amortization
• Miscellaneous Losses

(-) NET FINANCE COSTS

• Financial Expenses
• (-) Financial Revenue

(+) MISCELLANEOUS REVENUE

OPERATING PROFIT

Non-Operating and Final Results

NON-OPERATING RESULTS

• (-) Non-Operating Expenses
• (+) Non-Operating Revenue

PROFIT BEFORE TAX (INCOME AND SOCIAL CONTRIBUTION)

• (-) Provision for Corporate Income Tax (Legal Entity)
• (-) Provision for Social Contribution on Net Income

NET PROFIT FOR THE YEAR XXX