September 11, 2018

Features Of Single Entry System

The main characteristics or features of single entry bookkeeping system can be highlighted as follows:
1. Lacks Fixed Rules And Principles
Single entry system is not maintained on the basis of fixed rules and principles. So, it lacks accounting principles and rules.

2. Incomplete Accounting System

Single entry system of bookkeeping ignores dual aspects of business transactions. So, it is incomplete system of accounting.

3. Lacks Arithmetical Accuracy

Single entry system does not help to prepared trial balance. So, arithmetical accuracy is not possible.

4. No Final Accounts

Final accounts (trading account and profit and loss account) and balance sheet cannot be prepared with the help of single entry bookkeeping.
 
features-single-entry-system

5. No True Profit Or Loss

Actual profit or loss of the business cannot be known because profit and loss is not prepared in this system of accounting.

6. No Disclosure Of Financial Position

Balance sheet cannot be prepared on the basis of single entry system. So, financial position of the business cannot be ascertained.

7. Suitable For Small Business Firms

It is suitable for small business firms having small volume of business transactions. Especially sole proprietorship and partnership firms prefer single entry system.

8. Economical System

Single entry system is the most economical and time saving method of recording financial transactions of the firm.