1. What are the merits of single entry system.
2. Write the disadvantages of single entry system.
3. Distinguish between single entry system and double entry system.
4. What are the differences between statement of affairs and balance sheet.
5. Explain how to calculate profit/loss under single entry system.
2.9
Practical Problems
H 나
1. Calculate profit from the following:
Capital at the end of the year = 18,000
Capital at the beginning of the year = 11,000
(Ans: Profit 7,000)
[Hint: 18,000 – 11,000)]
2. A Trader is keeping his books under single entry system. His capital at the beginning of the year
is *15,000, and capital at the end of the year is * 10,500.
(Ans : Loss 4,500)
Answers
Answered by
2
1. What are the merits of single entry system.
(i) Since this system is very simple, anyone can maintain it without any adequate knowledge of accounting.
(ii) Limited accounts are to be opened under this system since the transactions relating to personal accounts are recognised only and not the Real and Nominal accounts.
Answered by
4
Q》1.What are the merits of single entry system.
A=
(i) Since this system is very simple, anyone can maintain it without any adequate knowledge of accounting.
(ii) Limited accounts are to be opened under this system since the transactions relating to personal accounts are recognised only and not the Real and Nominal accounts.
Q》2.Write the disadvantages of single entry system.
A=
☀️Unscientific And Unsystematic. The single entry system is unsystematic and unscientific system of recording financial transactions.
☀️Incomplete System.
☀️Lack Of Arithmetical Accuracy.
☀️Does Not Reflect True Profit Or Loss.
☀️Does Not Reflect True Financial Position.
☀️Frauds And Errors.
☀️Unacceptable For Tax Purpose.
Q》3.Distinguish between single entry system and double entry system.
A=
☀️Recording method: Single-entry bookkeeping gives a one-sided picture of transactions recorded in the cash register.
☀️In double entry, changes due to one transaction are reflected in at least two accounts.
☀️In single entry, there is no method for error correction or detection.
Q》4.What are the differences between statement of affairs and balance sheet.
A=
☀️Statement of Affairs is a statement showing assets, liabilities and capital of the entity prepared on the basis of a single entry system of bookkeeping.
☀️A Balance Sheet is a statement showing assets, liabilities and equity of the company prepared on the basis of the double entry system of bookkeeping.
Q》5.Explain how to calculate profit/loss under single entry system.
A=
☀️It is prepared under the single entry system in order to find out the amount of opening or closing capital of the business.
☀️According to net worth method, profit or loss of the business is determined by making comparison between the capitals of two dates of a period.
☀️Statement of affairs is prepared as balance sheet.
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