Unit-15 Accounts From Incomplete Record-I

In this unit you will learn about the net worth method of ascertaining the profit of a business owned by a sole proprietor or a partnership firm.

What is a Single Entry System? Distinguish it from Double Entry System. 

{{currentAnswerList.length}}   Answers

1   Answers


Written on {{ansDate($index)}}


Learning Pundits Content Team

Written on Apr 24, 2019 1:40:07 PM

The big business concerns usually have a separate Accounts Department and employ qualified and expert accountants for this purpose. But small traders, petty shopkeepers and persons in the profession cannot afford to employ qualified persons, for the accounting work.

Such persons usually keeps the accounting records themselves which are often incomplete. Some of them keep only personal accounts of customers and suppliers, some keep only a Cash Book while others may keep personal accounts of customers' and suppliers' as well as the Cash book. Thus, they maintain partial and incomplete records without fully following the principles of Double Entry System of Book Keeping. Such partial and incomplete recording of transactions is known as 'Single Entry System’. 

The. term Single Entry System is quite misleading. It gives an impression that under this system only one aspect of a transaction is recorded in books. This is not true. Single Entry System actually refers to incomplete records or the defective Double Entry System.

Under this system, for certain transactions both the aspects are recorded while for others only one aspect is recorded. Some transactions may simply be ignored, they are not recorded at all. Take the case of a firm which maintains a Cash book and personal accounts of customers and suppliers. When cash is paid to it creditor, it will be recorded on the payment side (credit) of the Cash Book and also debited to the personal account of the creditor.

'Thus you find that both the aspects of this transaction have been duly recorded and the double entry is complete. The same thing applies to cash received from a debtor.

Weekly Contests Leaderboard

Rank - {{getRank($index,weeklyWinner)}}: {{weeklyWinner.userName}}


« Previous Next »

Subscribe to our RSS Feed