ACCOUNTS FROM INCOMPLETE RECORDS OR SINGLE-ENTRY BOOKKEEPING SYSTEMS:
Single-entry bookkeeping system means any accounting records which do not contain a complete record (i.e. a record of both the debit and credit aspects) of each and every transaction.
Sing Single le-e -ent ntry ry
book bookke keep epin ing g
syst system em also
known
as Single-entry
accounting system is a method of bookkeeping relying on a one sided accounting entry to maintain financial information.
FEATURES OF SINGLE-ENTRY SYSTEM:
1. Incompleteness of accounting records is the most important feature of the single-entry system.
2. Under this system, no hard and fast rules are observed for recording business transaction.
3. There is no uniformity under this system as regards the recording of business transactions.
4. Under this system, all accounts are not maintained. 5. The cash book, maintained under this system, usually, mixes up the business transaction as well the private transaction of the proprietor.
6. As a complete record of each and every transaction is not maintained under this system, this system gives only partial information, not full information of the business.
7. As the full information information about the business is not given by this system, system, this system is an incomplete, unscientific, unsatisfactory and unreliable system of bookkeeping.
8. It is a simple and economical system of bookkeeping, as it needs less number of books of account.
9. It is, usually, adopted by small business concern like sole trader and partnership firms whose volume of business and financial resources do not warrant the elaborate and costly double-entry system.
ADVANTAGES SINGLE-ENTRY SYSTEM: 1. This system is easy to understand. 2. It is a simple method of recording business transactions, because an elaborate accounting procedure is not involved in this system. 3. It is less costly when compared the double-entry system because fewer
books of account are maintained under this system.
4. As this this sy syst stem em is simp simple le and and less less cost costly ly,, it is su suit itab able le for for smal smalll concerns.
DISADVANTAGES SINGLE-ENTRY SYSTEM: 1. Data may not be available to management for effectively planning and controlling the business.
2. Lack of systematic and precise bookkeeping may lead to inefficient administration and reduced control over the affairs of the business.
3. Single-entry records do not provide a check against clerical error, as does a double-entry system. This is one of the most serious defects of single-entry systems.
Single le-e -ent ntry ry reco record rds s seld seldom om make make prov provis isio ion n for for reco record rdin ing g all all 4. Sing tran transa sact ctio ions ns..
In
addi additi tion on,,
many many
inte intern rnal al
tran transa sact ctio ions ns,,
such su ch
as adjusting entries are often not recorded.
5. Because no accounts are provided for many of the items appearing in both both the the Inco Income me Stat Statem emen entt and and Bala Balanc nce e Shee Sheet, t, omis omissi sion on of important data is possible.
6. In the absence of detailed records of all assets, lax administration of those assets may occur.
7. Theft and other losses are less likely to be detected.
TYPES OF SINGLE-ENTRY SYSTEM: 1.Pure Single-Entry Single-Entry System 2.Simple Single-Entry Single-Entry System 3.Quasi Single-Entry Single-Entry System
Pure Pure Sing Singlele-En Entry try Syste System: m:
is a system under which no
subsidiary books are maintained. Only a ledger, containing only the personal accounts of debtors and creditors is kept.
Simple Simple SingleSingle-Entr Entry y System: System:
is a sy syst ste em under nder whic hich a
subsidiary book, viz., the cash book, and ledger, containing only the personal accounts of debtors and creditors are maintained.
Quasi Single-Entry System:
is a system under which more than
one subsidiary book (usually, the cash book, the purchase book, the sales book, the purchases returns book and the sales returns book) and ledger are maintained.
