UNIT-1-Single Entry System
1.What is Single Entry system?
In a Nutshell,Single Entry System can be defined as an incomplete, inaccurate, unscientific and unsystematic style of account keeping.
Single entry system is "a defective double entry system adjusted to the convenience of the owner".
In other words, what cannot be strictly considered double entry system.
2.List the features of Single Entry System
1.Corporate bodies cannot follow this system.
2.In most of the cases, Only personal accounts are maintained.
3.A Cashbook is kept clubbing both business and Private transactions.
4.This is no uniformity in recording the two fold aspect of various transactions.
5.The information in respect of real and nominal accounts is ascertained from vouchers, receipts, invoices, counterfoils, etc.
3. What are the defects of Single Entry system?
1. Trail balance cannot be prepared: Because both the transactions are not recorded
2. Trading and Profit and Loss account cannot be prepared:Due Absence of Nominal accounts.
3.Balance sheet cannot be prepared:Due to No real accounts
4.No correct price of the business is available:Difficult to fix proper value of assets,especially of goodwill at the time of sales.
5.Scope for errors:prone to commission of errors due to unsystematic nature.
6.Scope for Frauds:Absence of Counter Checks.
7.Inadequate information:No recorded evidence.
8.Unscientific method:Results of business activity; ie. profit is sought to be calculated from the difference of Assets and liabilities.
9.Causes of profit unknown: Due to lack of profit statistical information.
10.Scope for doubt:Due to Unreliable records, any information obtained will not be free from doubt.
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