(1) Where the bankrupt has been engaged in any business for any period of 2 years before the petition, he or she commits an offence if—
(a) he or she has not kept proper accounting records throughout that period and throughout any part of the initial period in which he or she was so engaged; or
(b) he or she has not preserved all the accounting records which he or she has kept.
(2) The bankrupt is not liable under subsection (1)—
(a) if his or her unsecured liabilities at the commencement of the bankruptcy did not exceed $1,000; or
(b) if he or she proves that in the circumstances in which he or she carried on business the omission was honest and excusable.
(3) For the purposes of this section a person is deemed not to have kept proper accounting records if in the 2 years before the petition he or she has not kept such records as are necessary to show or explain his or her transactions and financial position in his or her business, including—
(a) records containing entries from day to day, in sufficient detail, of all cash paid and received;
(b) where the business involved dealings in goods, statements of annual stock takings; and
(c) except in the case of goods sold by way of retail trade to the actual customer, records of all goods sold and purchased showing the buyers and sellers in sufficient detail to enable the goods and buyers and sellers to be identified.