what is a single entry system? what are its drawback? explain the two method of ascertaining profit when accounting record are incomplete.
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A single entry system records each accounting transaction with a single entry to the accounting records, rather than the vastly more widespread double entry system. The single entry system is centered on the results of a business that are reported in the income statement. The core information tracked in a single entry system is cash disbursements and cash receipts. Asset and liability records are usually not tracked in a single entry system; these items must be tracked separately.
This kind of system is an incomplete system as it does not record the two aspects of the accounting procedure
No record of nominal account or the cash account is recorded by the single entry system except the capital account
Single entry system does not support advance calculations such as calculation of trial and balance.
Single entry system don’t reflect the true profit or true loss that occurs within that period
There is a great tendency of occurrence of fraud and error in this entry system.
1)Statement of affairs method
2) conversion into double-entry method.
This kind of system is an incomplete system as it does not record the two aspects of the accounting procedure
No record of nominal account or the cash account is recorded by the single entry system except the capital account
Single entry system does not support advance calculations such as calculation of trial and balance.
Single entry system don’t reflect the true profit or true loss that occurs within that period
There is a great tendency of occurrence of fraud and error in this entry system.
1)Statement of affairs method
2) conversion into double-entry method.
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