The Transition of an Individual Entrepreneur from Tax Records to Accounting

This bachelor’s thesis focuses on the analysis of the transition of a sole proprietor from tax record-keeping to double-entry accounting. The theoretical part is divided into three chapters, which cover tax records, accounting, and the transitional bridge. The practical part presents a model case of a fictitious entrepreneur undergoing the transition from tax records to accounting. It provides a detailed description of the transformation of asset and liability items during the transition and evaluates various scenarios regarding their impact on the personal income tax base. Since tax record-keeping is generally more advantageous for entrepreneurs, they usually switch to accounting due to a legal obligation. The transition process itself primarily involves the preparation of a transitional bridge, in which appropriate accounts are assigned to individual items and their impact on the tax base is determined. This impact can be partially influenced by the entrepreneur, as opting to spread certain adjustments to the tax base over time may result in tax optimization.