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P2 C10 Accounts from Incomplete Records — Account STD 11 Commerce — Question

Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C10 Accounts from Incomplete Records3 Marks
Question
What is Single Entry System? Give the characteristics of Single Entry System.
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Answer

Meaning: Small traders like hawkers, sole traders, small shopkeepers do not want to maintain all books of accounts. As per requirement, they keep only cashbook and ledger and record transactions relating to cash and personal accounts only. In this system double effect may not be given to each transaction of business. As per requirement, only one effect is given to some transactions, hence it is known as Single Entry System. Characteristics of Single Entry System: $1.$ Incomplete records : As a rule, only cash transactions and personal accounts transactions are recorded. It is an incomplete method of accounting. $2.$ Mixture of Single Entry and Double Entry System : Most of the transactions are recorded with one effect whereas others are recorded with double effect and several transactions are not recorded. $3.$ Books as per requirement: Small traders keep a few books of accounts like cashbook and ledger as per their requirement. $4.$ Only personal accounts : Only personal accounts are maintained in the ledger. $5.$ Small retailers: Generally small traders like hawkers, small shopkeepers, street-venders, small retailers, etc. prepare accounts under this system. $6.$ Records: Complete accounting records are not maintained. $7.$ Uniformity: There is no uniformity in this systems for keeping books of accounts by traders. $8.$ Annual accounts : Trial balance and Balance sheet can’t be prepared under this system. $9.$ Entry for internal transactions: In this method, there is no effect (or entry) for internal transactions of business. e.g., Depreciation on assets, Interest on capital, etc.

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