Concept Of Single Entry System
There are different forms of business concerns. Some of these concerns are small traditionally run and legally not required to maintain their books of accounts under a particular accounting system. Generally, a small sole trading concern run by the not well-educated owner having no idea of a modern accounting system maintains his books of accounts without following any proper and complete accounting system.
On the contrary, there are some business concerns such as modern joint-stock companies, which maintain their books of accounts under a systematic system as per legal requirement. Thus, accounting systems followed by business concerns such as modern joint-stock companies, which maintain their books of accounts under a systematic system as per legal requirement. Thus, accounting systems followed by business concerns may broadly be classified as improper and incomplete, and systematic accounting systems. The former type of accounting is commonly termed a single-entry accounting system, while the latter is a double-entry accounting system.
Definitions of single entry system
It is an incomplete, inaccurate, unscientific, and unsystematic style of accounting account keeping.
Single entry system method employed for recording transactions, two fold aspect and consequently fails to provide the Businessman with the information necessary for him to be able to ascertain the position.
Meaning Of Single Entry System
A single entry system is an incomplete form of recording financial transactions. It is the system, which does hot record tow aspects or accounts of all the financial transactions. It is the system, which has no fixed set of rules to record the financial transactions of the business. It records only one aspect of a transaction.
Thus, it is not a proper system of recording financial transactions, which fails to present complete information required by the management. It mainly maintains each book and personal accounts of debtors and creditors. It ignores nominal account and real account except cash account.
Hence, it is an incomplete form of the double-entry system, which fails to disclose the true profit of loss and financial position of a business organization.