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Accounts from Incomplete Records — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountAccounts from Incomplete Records1 Mark
Question
Why do big business houses not maintain their accounts under single entry system?
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Answer

Big business houses not maintain their accounts under single entry system because:
  1. Financial Position of the Business cannot be Assessed: In the absence of assets accounts, it is difficult to determine correct financial position of the business on any particular day by preparing a Balance Sheet.
  2. Difficult to Ascertain the Value of Business: The records being inadequate, it is difficult to value the business, especially goodwill.

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