Main Features of Single-entry System:
The main features of the Single-entry system are:
1. Under this system, no hard and fast rules are observed for recording business transactions. For instance, i.e., for transactions involving personal accounts of debtors and creditors and cash account, generally, both the aspects are recorded. (For instance, cash received from a debtor, say, Krishna, is recorded in cash account as well as in Krishna's account. Similarly, cash paid to a creditor, say, Balkrishna, is recorded in cash account and in Balkrishna's account).
For most of the transactions, such as expenses paid, incomes received, goods purchased on credit and goods sold on credit, usually, only one aspect is recorded. (For instance, rent paid is recorded only in the cash account, but not in the rent account. Similarly, interest received is recorded only in the cash account, but not in the interest account. Likewise, goods bought on credit from a supplier, say, Gopalkrishna is recorded only in Gopalkrishna's account, but not in the purchases account. So also, goods sold on credit to a customer, say, Nandagopal, is recorded only in Nandagopal's account, but not in the sales account).
For a few transactions, such as depreciation charged on fixed assets, stock destroyed by fire, etc., none of the aspects is recorded. (For instance, depreciation charged on furniture is recorded neither in the depreciation account nor in the furniture account).
2. As only one aspect is recorded for most of the transactions, this system is popularly called the single-entry system. But the name single-entry system is not the correct name for this system, because this system does not imply that only one aspect is recorded for each and every transaction. Therefore, in modern accountancy practice, the name, "Accounting from Incomplete Records" is used for this system.
3. As a complete record of each and every transaction is not kept under this system, it is an incomplete, unscientific and unsatisfactory system of accounting.
4. As it is an unsatisfactory system of accounting, it is followed by only small concerns which have very few transactions and which cannot afford to adopt the elaborate and costly double-entry system of book-keeping.
In this context, it should be noted that this system can be adopted by only sole-trading concerns and partnership firms, joint stock companies cannot adopt this system because of legal restrictions.
The main features of the Single-entry system are:
1. Under this system, no hard and fast rules are observed for recording business transactions. For instance, i.e., for transactions involving personal accounts of debtors and creditors and cash account, generally, both the aspects are recorded. (For instance, cash received from a debtor, say, Krishna, is recorded in cash account as well as in Krishna's account. Similarly, cash paid to a creditor, say, Balkrishna, is recorded in cash account and in Balkrishna's account).
For most of the transactions, such as expenses paid, incomes received, goods purchased on credit and goods sold on credit, usually, only one aspect is recorded. (For instance, rent paid is recorded only in the cash account, but not in the rent account. Similarly, interest received is recorded only in the cash account, but not in the interest account. Likewise, goods bought on credit from a supplier, say, Gopalkrishna is recorded only in Gopalkrishna's account, but not in the purchases account. So also, goods sold on credit to a customer, say, Nandagopal, is recorded only in Nandagopal's account, but not in the sales account).
For a few transactions, such as depreciation charged on fixed assets, stock destroyed by fire, etc., none of the aspects is recorded. (For instance, depreciation charged on furniture is recorded neither in the depreciation account nor in the furniture account).
2. As only one aspect is recorded for most of the transactions, this system is popularly called the single-entry system. But the name single-entry system is not the correct name for this system, because this system does not imply that only one aspect is recorded for each and every transaction. Therefore, in modern accountancy practice, the name, "Accounting from Incomplete Records" is used for this system.
3. As a complete record of each and every transaction is not kept under this system, it is an incomplete, unscientific and unsatisfactory system of accounting.
4. As it is an unsatisfactory system of accounting, it is followed by only small concerns which have very few transactions and which cannot afford to adopt the elaborate and costly double-entry system of book-keeping.
In this context, it should be noted that this system can be adopted by only sole-trading concerns and partnership firms, joint stock companies cannot adopt this system because of legal restrictions.
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