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Single Entry System


Q.N.1. Define Single entry? What are its characteristics? What are its various types?

Ans.   Single entry system: - It is defined as the method of accounting which does not follow the principle of double entry system .Under this method only one account is given debit or credit for each transaction. Under this method, only personal accounts are maintained and impersonal account may not be maintained in the books.


 Characteristics of Single Entry System:-

(1)    This system is a mixture of (i) double entry (ii) Single entry and (iii) no entry.

(2)    This system is suitable for small business.

(3)    In this system, generally personal Account are kept but real and Normal Account are ignored.

(4)    In the absence of record of the two-fold aspect of every transaction, it is not possible to prepare a trial balance and check the arithmetical accuracy of the books of account.

(5)    Under this system the profit or loss can be found out but its composition will not be available.


The single Entry System can be classified into following three categories:-

(1)    Pure Single Entry System:-Under this type of Single entry, the dual aspect of each transaction is ignored. Only personal account of debtors and creditors are kept but no record is kept for Real or Nominal Account.

(2)    Simple Single Entry System:-Under this system, (i) Personal Account and (ii) Cash book are kept.

(3)    Quasi Single Entry System:-Under this System, (i) Personal Account, (ii) Cash book and (iii) Some other subsidiary books are kept.


Q, N. 2. What are the merits and demerits of Single Entry System?


Ans. Merits of Single Entry System:-

(1) It is an easy and simple method of maintaining books of accounts.

(2) It is conventional and economical.

(3) It is less time consuming.


       Demerits of Single Entry System:-

(1)It is not a scientific method of accounting because it does not record the two-fold aspect of each transaction.

(2)No trial balance can be prepared under Single Entry System.

(3)The arithmetical accuracy of the books cannot be checked in the absence of trial balance.

(4)In the absence of various checks, Fraud is more easily committed and it is very difficult to detect.

(5)In the absence of Real and nominal accounts the true financial position of the business cannot be ascertained.


Q.N.3. Distinguish between

                            (a) Single Entry and Double Entry System.

                            (b) Statement of affairs and Balance Sheet


Ans.  (a)  Difference between Double Entry System and Single Entry System


Double Entry System

Single Entry System


Under this system, both aspect of each transaction are record.

Under this system, both aspect of each transaction are not recorded.


In this system, Personal, Real and Nominal accounts are kept fully.

In this system, only Personal Accounts are kept and Real and Nominal Accounts are ignored.


In this system, Cash book, General ledger, Debtors’ Ledger and Creditors’ Ledger are maintained.

In this system, only Debtors’ Ledger and creditors’ Ledger are kept. Cash book is also kept but personal transaction gets mixed up with business transaction.


Under this system, arithmetical accuracy can be checked by preparing Trial Balance at any moment of time.

Under this system, arithmetical accuracy cannot be checked because to Trial Balance can be prepared.


In this system, Trading, Profit and Loss Accounts and balance sheet can be prepared.

In this system, Trading, Profit And Loss Accounts and Balance sheet cannot be prepared.


For interpretation of financial statement, we can compute different ratios, if the accounts are maintained under this system.

Vital ratios cannot be computed, if the accounts are maintained under this system.


This system is scientific and follows certain rules.

This system is unscientific and does not follow any concrete rules.

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