a) Why many business organization using Single Entry system in recording transaction, also write the limitation of single entry and why double entry system is good for calculating the performance of a business? Give a practical example of Single entry system?
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The limitation of single entry is written as single entry is an incomplete system and does not follow credit and debit side.
- Cash receipts and payments are managed by the single entry accounting system.
- A collection of rules regulating how it is used are missing for single entry. The system is also susceptible to miscalculations and errors, that's why the limitation is recorded.
- The double entry method allows for given Trial Balance. The measurement and accounting rules that are to be ascertained are based on the Trial Balance. In addition, with the help of annual statements a business can determine its performance.
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