{"id":1386,"date":"2022-03-29T15:01:00","date_gmt":"2022-03-29T07:01:00","guid":{"rendered":"https:\/\/pacersconsulting.com\/?p=1386"},"modified":"2022-07-14T17:18:53","modified_gmt":"2022-07-14T09:18:53","slug":"how-to-prepare-accounting-records-and-filing-tax-without-an-accountant","status":"publish","type":"post","link":"https:\/\/pacersconsulting.com\/en\/blog-en\/taxation-en\/how-to-prepare-accounting-records-and-filing-tax-without-an-accountant\/1386\/","title":{"rendered":"How to Prepare accounting records and Filing tax without an accountant"},"content":{"rendered":"\n

Pacers has received numerous questions of accounting and tax filing for unlimited companies. Let us share our practical knowledge with you to support your business operation.<\/p>\n\n\n\n

Is unlimited company not required to prepare accounting records and tax filing?<\/h2>\n\n\n\n

Certainly not! Although there is no legal requirement for unlimited companies to prepare audit reports, accounts and tax returns should be submitted to the Inland Revenue Department when filing tax<\/p>\n\n\n\n

As unlimited companies are not required to hire Certified Public Accountants, they are subjected to a lower accounting standard than limited companies. Basically, it will be acceptable if the accounts comply with the submission requirements of the Inland Revenue Department.<\/p>\n\n\n\n

In general, based on the amount of annual revenue generated by the unlimited companies (from 1st <\/sup>April to 31st<\/sup> March in the following year), the Inland Revenue Department will impose different requirements of submitting tax returns.<\/p>\n\n\n\n

  1. For unlimited companies generating annual gross income not exceeding HK$2,000,000, they are treated as small businesses and only an income statement is required (Stating the company\u2019s revenue, expense, and profit clearly)<\/li>
  2. Separate accounts, income statement and statement of financial position (Listing company\u2019s assets and liabilities) should be submitted for each business if its gross income exceeded $2,000,000.<\/li><\/ol>\n\n\n\n

    How to prepare book entries for an unlimited company?<\/h2>\n\n\n\n

    Accounting software and professional knowledge are not necessary when preparing book entries for an unlimited company. Instead, some basic techniques and simple procedures can solve the problem.<\/p>\n\n\n\n

    Income statement<\/h3>\n\n\n\n

    The income statement shows the company\u2019s revenue and expense throughout the year.<\/p>\n\n\n\n

    Here are some items that should be well-recorded and classified.<\/p>\n\n\n\n

    Sales:<\/strong> Revenue generated from the daily operation of the company<\/p>\n\n\n\n

    Purchase:<\/strong> Expenditure of buying goods<\/p>\n\n\n\n

    Gross profit:<\/strong> Sales \u2013 Purchase<\/p>\n\n\n\n

    Other income:<\/strong> Revenue generated other than the daily operation of your company. For instance, subsidies from government anti-epidemic fund, gain on disposal of assets, bank interest income.<\/p>\n\n\n\n

    Expense: <\/strong>Expenditures incurred from the daily operation of your company, including salaries, rental expenses, administrative expenses.<\/p>\n\n\n\n

    Net profit: <\/strong>Gross profit + Other income – Expenses<\/p>\n\n\n\n

    Statement of Financial Position<\/h3>\n\n\n\n

    The statement of financial position is a statement of assets and liabilities at the year-end of a company (31st<\/sup> March of every year). The procedures will be more complicated than that of an income statement. Here are some standard classifications<\/p>\n\n\n\n

    1. Assets<\/strong><\/p>\n\n\n\n