Single Entry System - accounts quiz

Single Entry System

In Single entry system of book-keeping only one aspect of the transaction is recorded. In simple words it is called as incomplete record of Book-keeping.

In single entry system Real accounts and Nominal accounts are not maintained.

Advantages Single Entry System

Single entry system is simple method of recording the business transactions.

Single entry system is less expensive when compared to double entry system of book keeping.

It does not require a specialized knowledge to maintain the books of accounts under single entry system.

Disadvantages of Single Entry System

Incomplete record : Single entry system of book keeping is an incomplete record as only one aspect of the transaction is recorded.

Lacks Accuracy : In this method as Trial Balance is not prepared it is difficult to know the arithmetical accuracy.

Balance Sheet : As Trial balance is not prepared it is not possible to prepare the balance sheet.

Comparative study : Due to incomplete information the comparative study of two years accounts cannot be undertaken.

True financial position : Because of the incomplete information true financial position of the business cannot be ascertained.

Managerial Decisions : Due to the lack of preparation of key accounts managerial decisions cannot be taken.