Accounting Criteria for Enterprises
Chapter I General Provisions
Article 1 In accordance with "The Accounting Law of the People's Republic of China," these Criteria are formulated to meet the needs of developing a socialist rnarket economy in our country, to unify the accounting standards and to ensure the quality of accounting information.
Article 2 These Criteria shall be applicable to all enterprises established within the territory of the People's Republic of China.
Chinese invested enterprises eslablished outside the territory of the People's Republic of China (hereinafier referred to as enterprises abroad) shall be required to prepare and disclose their financial reports to the relevant domestic departments in accordance with these Criteria.
Article 3 Accounting systems of enterprises shall be formulated in compliance with these Criteria.
Article 4 An enterprise shall accurately account for all its business transactions actually taken place, and record in reliable reports all the business activities of the enterprises itself.
Article 5 Accounting and financial reports shall be based on the presumption that the enterprise shall carry on its operation in a continuous and regular manner into the foreseeable future.
Article 6 An enterprise shall account for its business activities and prepare its financial statements in distinct accounting periods.
Accounting periods may be a fiscal year, a quarter, or a month, commencing on the first days thereof according to the Gregorian calendar.
Article 7 The Renminbi shall be the bookkeeping base currency.
A foreign currency may be adopted as the bookkeeping base currency for enterprises which conduct business transactions mainly in foreign currency. However, in preparing financial statements, business transactions in foreign currency are to be converted into Renminbi.
Enterprises abroad shall convert their foreign currency business transactions into Renminbi in preparing financial statements to the relevant domestic departments.
Article 8 The debit and credit double entry bookkeeping technique is to be adopted for recording all accounting transactions.
Article 9 Accounting records and financial reports shall be formulated in the Chinese language. Minority languages may be used concurrently with the Chinese language by enterprises in autonomous areas of minority nationalities.
And a foreign language may also be used concurrently by enterprises with foreign investment or foreign enterprises.
Chapter II General Principles
Article 10 The accounting records and financial reports shall be based on business transactions actually taken place, and truthfully reflect the financial position and operating results of an enterprise.