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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 characterstics of single entry system.
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Answer

Single entry system : Small traders do not maintain complete accounts as in doubleentry system. Instead of this they keep only cash book and ledger and record transactionsrelating to cash and personal accounts only. As per requirement of the business only oneeffect is given to some transaction, hence it is known as single entry system. Characterstics of Single Entry system : They are as follow. $(i)$ Small Retailers : Normally sole trader, small shopkeepers and small retailers keeptheir books as per single entry system. $(ii)$ Principle of Double Entry System : Single entry system's transaction followed theprinciple of double entry system. $(iii)$ Mixture of Single Entry or Double Entry : In this method, some transactions are notrecorded with one effect where others are recorded with double effect. $(iv)$ Books as per requirement: Traders keep a few books of account like cash book andledger as per their requirement. $(v)$ There is not uniformity : In this method, there is no uniformity in methods orsystems for preparation of an account by traders. Some keep only cash book whilethe other prepare subsidiary books also. $(vi)$ Incomplete records : In this method, there is no complete record of every transactionsby a trader. Some transactions are recorded incompletely. This means only one effecthas given to the accounts. $(vii)$ Entry for internal transaction: In this method, there is no effect for internal transactionof business. e.g. depreciation on assets, interest on capital etc. $(viii)$ Save labour, time and money : In this system, all transaction are not given doubleeffect. So traders, labour and time can save. Because of small business and transactionof expenses on that is less.

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