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Accounts Bcom CH 4question Paper

Accounts

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himanthr92
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13 views

Accounts Bcom CH 4question Paper

Accounts

Uploaded by

himanthr92
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Coversion of single entry

system to double entry system


SINGLE ENTRY SYSTEM
DEFINITION
MEANING
According to Carter, “single
It is a method of accounting which entry cannot be termed as a
does not follow the principle of double system, as it is not based on any
entry system. It is called as scientific system like double
unscientific, unsystematic, crude entry system. Because of this
method of book keeping. It considers reason, single entry is now-a-
only one aspect of transaction either days known as preparation of
debit or credit and other aspect either accounts from incomplete
debit or credit is ignored. The system records”.
maintains only personal accounts and
impersonal accounts are excluded.
2
Features of single entry
⊹ Absence of uniformity
⊹ Records maintained
⊹ Mixing of transactions
⊹ Suitability
⊹ Dependence on original vouchers
⊹ Finalisation of accounts

3
Types of single entry
⊹ Pure single entry: the dual aspect of accounting is
ignored. This method maintains only personal
accounts of debtors & creditors (no real & nominal
a/c)
⊹ Simple single entry: Cash book is maintained along
with personal accounts of debtors and creditors
and no other subsidiary books are maintained
⊹ Quasi single entry: cash book, personal accounts
and a few subsidiary books are also maintained. 4
advantages
⊹ Economical
⊹ Suitable to small and medium industries
⊹ No need of specialized knowledge & skill

5
disadvantages
⊹ No arithmetical accuracy
⊹ No trading and profit & loss a/c
⊹ No reliable information
⊹ No prevention of frauds and errors
⊹ No true financial position
⊹ No important decisions
⊹ No comparison
⊹ Difficult to borrow loan
⊹ Tough to find taxable income
⊹ Tough to solve issues 6
Double entry system
⊹ According to the Dual Aspect Concept, all
business transactions have a two-way or dual
effect. This tells us that the business transaction
of the particular entity has a minimum of two
accounts which are recorded in the books. This
principle is known as the double-entry concept
or system.

7
Distinction between single entry and double
entry system
Basis Single entry Double entry system
Accepted There is no such accepted accounting This system is based on some
accounting principle principles followed under this system accepted accounting principles
Dual aspect There is no dual aspect or two fold This system has two fold systems
effect (debit & credit aspects)
Arithmetical Arithmetical accuracy cannot be Arithmetical accuracy is verified with
accuracy checked the help of trial balance
Need of expert There is no need of skilled and qualified There is a need of expert accountant
accountants accountants to maintain books of to maintain the set of books
accounts
Cost consideration No cost burden to maintain the books Books maintenance cost is very high
Suitability This system is very suitable for small & Double entry system is suitable for
medium scale industries large scale industries
8
Distinction between single entry and double
entry system
Basis Single entry Double entry system

Profit ascertainment No correct gross profit and net profit are Correct measurement of gross profit
measure and net profit of business

Financial No trading, profit & loss accounts are Trading, profit & loss accounts are
statements prepared prepared with balance sheet

Measurement of No true financial positions are True financial positions are measured
true financial measured with incomplete information
position

Prevention of frauds No prevention of frauds and errors Prevention of frauds and errors due to
and errors complete information and record

9
Conversion of Single entry to double entry system

⊹ To enjoy the benefits of double entry


system of book keeping
⊹ To communicate the financial results
clearly and systematically to the users
⊹ To make easy in ascertainment of
business tax liability
⊹ To minimize the chances

10

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