Explain the slip system of bank book-keeping. What are its advantages and disadvantages?
Answers
Hello..
In this system, posting is made from slips prepared inside the organisation itself or from slips filled in by its customers. So entries are not made in the books of original entry or subsidiary books, but posting of entries is done from slips. In a banking company, the main slips are pay-in-slips, withdrawal slips and cheques and all these slips are filled in by clients of the bank.
The main advantages of the slip system are:
(1) The bank saves a lot of clerical labour as most of the slips are filled in by its customers.
(2) Subsidiary books are avoided as posting is done from slips.
(3) Entries can be recorded with minimum delay as slips can easily pass from hand to hand among clerks concerned.
The disadvantages of the slip system are :
(1) Slips may be lost, destroyed or misappropriated as these are loose.
(2) Books cannot be verified if subsidiary books are not kept.
hope it helps..