Needs of single entry system
Answers
Advantages Of Single Entry System
Main benefits or advantages of single entry system of book keeping can be expressed as follows:
1. Simple And Easy Method Of Recording Transaction
Single entry system does not need any special accounting knowledge and personnel to record financial transaction of the business. It can be maintained easily by the business owner. So, this system of book-keeping is simple to maintain and easy to practice.
2. Economical.
This is another benefit of single entry system. It is a less costly system of recording business transactions compared to double entry system. It is economical because of limited number of transactions and limited number of books (only personal account and cash account).
3. Suitable For Small Business
Double entry system is very expensive and time consuming because of large numbers transactions and various books of accounts. So, small firms with limited financial transactions prefer single entry system of book keeping.
4. Time Saving
Single entry system is less time consuming because of limited numbers of books and less number of business transactions.
5. Easy To Determine Profit Or Loss
It is very easy to ascertain profit or loss of the business under single entry system of book keeping. Profit or loss can be obtained by comparing the ending balance with the beginning of the business for the specific accounting period.
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Answer:
Explanation:
Single entry system is a "system of a book keeping in which as a rule only records of cash and personal accounts are maintained ,it is always incomplete double entry varying with circumstances".