Chapter Three

Keeping Commercial Books

Saood Ali Saeed201345444

The trader is obliged to keep commercial books

It will be observed that duty applies to all traders, provided that their capital exceeds BD10,000 regardless whether the trader is

local or foreigner, and the notwithstanding the legal nature of the trader whether he is a natural person or a company.

Functions of Commercial Books :-

Evaluation of commercial status

Creating evidence of proof for traders

Basis for financial evaluation

Reference for Bankruptcy cases

Types of commercial books and documents

Compulsory commercial

books

Optional commercial

books

Compulsory commercial

books :

1. Basis Journal book :

The trader shall enter all the commercial transactions and all

his personal withdrawals on a daily basis and in detail . (

month by month )

All transactions related to the trader and practiced by him,

like selling, buying, receiving or paying debts , etc...

All expenses relater to the trader like his expenses incurred

by him and his family.

Compulsory commercial

books

2. Ancillary Journal books :

The legislator permitted the trader to enter the details of his

different commercial transactions, on a daily basis then

transfer the entries to the basis journal book .

However, if the entries in the ancillary journal books

remained there without being transferred to the basis journal

book, as the law requires, that ancillary journal books

considered a basic journal book .

Compulsory commercial

books

3. General Ledger book :

• Accounting Operations

• The trader able to make an inventory of all movable and

immovable property commercial papers

4. True and original copies of relevant documents :

The trader obliged to maintain true and original copies of all

correspondence and other documents related to his trade .

Supporting documents for the entries made

A basis for comparison and verification

Compulsory commercial

books

Optional commercial books :

1. Draft commercial books

2. Cash book

3. Commercial book

4. Store book

1. Draft commercial books :

Trader is forbidden by law to leave any blanks or delete or

strike off any entry made if any of the commercial books he

obliged to keep, or to insert entries between the lines or write

on the margins of these books.

Hence: Eliminating the risk of incorrect entries in these books.

2. Cash book :

The movement of incoming and outgoing cash transactions .

Hence: Ascertains the liquidity status in the organization .

Optional commercial books

3. Commercial papers book :

A registers for such papers, either individually or collectively,

depending on the volume and nature of the instruments .

Hence: Consideration their maturity dates .

4. Store book :

The movement of incoming and outgoing goods .

The legislator in Bahrain when the Minister of Industry and

Commerce was authorized to exempt companies and banks

from book-keeping of commercial books ( electronically

maintaining their accounts ) .

Optional commercial books

Thank you for listening and Good

luck