Question
Mention three characteristics of Single Entry System.
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Answer
Features of Single Entry System:
- Suitability: This system is suitable for small-size businesses where the number of transactions is less.
- No Uniformity: This system may differ from firm to firm as it is a mere adjustment of Double Entry System according to requirements and convenience.
- Maintenance of Personal Accounts: Usually under this system, only personal accounts are maintained and real and nominal accounts are avoided. Therefore sometimes, it is defined as a system where only personal accounts are kept.
- Maintenance of Cash Book: Generally, a Cash Book is maintained in this system which mixes up business as well as personal transactions.
- Dependence on Original Vouchers: Usually under this system, original vouchers are scrutinised for collection of information. For example, in case of credit sale, the owner may keep the invoice without recording it in accounting books and at the end of a particular period the total of the invoices gives credit sales of the business. Similarly, the amount of credit purchases may be determined on the basis of original invoices received from the suppliers.
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