Accounting records definition
/What are Accounting Records?
Accounting records are the original source documents, journal entries, and ledgers that describe the accounting transactions of a business. Accounting records support the production of financial statements. They are to be retained for a number of years, so that outside entities can inspect them and verify that the financial statements derived from them are correct. Auditors and taxing authorities are the entities most likely to inspect accounting records.
Related AccountingTools Course
Accounting Information Systems
Accounting Record Retention Requirements
The legal requirements to maintain accounting records are not consistent. At a minimum, records should be stored for as long as required to support an audit by the Internal Revenue Service. An offsetting issue is that eliminating records as soon as legally allowable keeps a business from having to produce accounting records in the event of a lawsuit.
It is not efficient to store accounting records forever, since the cost of storage will eventually exceed any benefit to be gained from having them available.
Examples of Accounting Records
Examples of accounting records are the general ledger, all subsidiary ledgers, invoices, bank statements, cash receipts, and checks.