China’s Accounting Law: Requirements for accounting books

China’s Accounting Law: Requirements for accounting books
1. Requirements for the registration of accounting books
The first paragraph of Article 15 of the Accounting Law states, "The registration of accounting books shall be based on audited accounting vouchers and comply with the applicable laws, administrative regulations, and the national unified accounting system. Accounting books include general ledgers, sub ledgers, journals, and other auxiliary ledgers. "The second and third paragraphs state, "Accounting books shall be registered in consecutive page numbers. If there are errors, missing pages, missing numbers, or line skips in accounting books, they shall be corrected as stipulated in the national unified accounting system, and the accountants and the chief of the accounting department (accounting supervisor) shall affix their seals at the place of correction. Where a computer is used for accounting purposes, the registration and correction of the accounting books shall comply with the provisions of the national unified accounting system.”
2. Requirements for setting up accounting books
According to Article 16 of the Accounting Law, An entity shall establish accounting books in accordance with the law to record and account for all its economic transactions, and shall not establish any secret accounting books for accounting purposes in violation of the provisions of the Accounting Law and the national unified accounting system.
3. Requirements for reconciliation of accounting books
According to Article 17 of the Accounting Law, an entity shall regularly check the accounting records with physical items, funds, and related documents to ensure that the accounting records are consistent with the actual quantity of physical items and the actual amount of funds, the accounting records are consistent with the relevant contents of the accounting vouchers, corresponding records in different accounting books are consistent, and the accounting records are consistent with the relevant contents of accounting statements.
An entity shall regularly check the relevant figures recorded in the accounting books with the physical inventory, monetary capitals, securities, and other entities and individuals with business relations to ensure that the accounts are consistent with the vouchers, ledgers, and physical items. Reconciliation work should be conducted at least once a year.
4. Requirements for correcting accounting books
If there is an error in the accounting records, it is not allowed to alter, replace, scrape, or eliminate with chemical substance, or transcribe. Corrections must be made as follows: ① In case of an error in bookkeeping, the incorrect text or figures should be marked with red lines for cancellation, but the original text must still be recognizable. And then the correct content should be filled in above the marked lines, and the bookkeeper should stamp the corrections. In case of an incorrect figure, a red line should be drawn under the whole figure, rather than just the wrong part. In case of a text error, it is allowed to underline the wrong words only. ② If there is an error in the accounting record due to an error in any accounting voucher, the accounting book should be registered based on the corrected accounting voucher.