Single Entry System & Double Entry System
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Accounts from Incomplete RecordsQ-2 | Accounts from Incomplete RecordsQuestion 5147 of 24
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Detailed Solution & Explanation
Difference Between Single Entry System and Double Entry System
Single Entry System
Double Entry System
Under Single Entry System, both aspects of
transaction are not recorded. For some
transactions two aspects, whereas for some
others one aspect or no aspect at all are
recorded.
Both aspects of a transaction are recorded,
in case of Double Entry System.
Under Single Entry System, usually cash,
bank and personal accounts of debtors &
creditors are maintained. Trial Balance
cannot be prepared under Single Entry
System, due to incomplete accounting
records. There- fore, arithmetical accuracy
of the accounting cannot be verified.
Under Double Entry System all types of
accounts are maintained.
Statement of Profit or Loss is prepared to
ascertain the net profit or loss under Single
Entry System of accounting which is not
appropriate.
Trial Balance is prepared under this system
and therefore, the arithmetical accuracy of
the books of account can be verified.
Only Statement of Affairs is prepared under
the Single Entry System since the assets &
liabilities appear at estimated figures.
Net profit or net loss can be ascertained by
preparing Profit & Loss Account, under
double entry system of accounting.
Single Entry System of accounting is used
by only small business entities.
The true financial position of the business
entity can be ascertained by preparing
Balance Sheet under the Double Entry
System of Accounting. Double Entry System
of accounting is used by almost all the
business entities.
About This Chapter: Final Accounts
Paper
Paper 1: Accounting
Weightage
25-30%
Key Topics
Sole Proprietor, NPO, Manufacturing
This chapter covers Sole Proprietor, NPO, Manufacturing and is part of Paper 1: Accounting in the CA Foundation exam.
View Official ICAI SyllabusExam Strategy Tip
This topic carries 25-30% weightage. Focus on understanding core concepts rather than memorizing.
Related Comparison Tables
More Questions from Accounts from Incomplete Records
From the following income and expenditure account of a Club for the year-ending 31 March, 2024, you are required to prepare receipt and payment account for the year ending 31 March, 2024 and Balance Sheet as on 1 April, 2023. INCOME AND EXPENDITURE ACCOUNT For the year ending 31st March, 2024 Expenditure Amount Income Amount To Lawn Maintenance To General Expenses To Stationery (depreciation) To Depreciation on Sports Material To Honorarium To excess of income over expenditure 42,000 13,000 1,500 22,000 10,400 44,500 By Subscription By Admission Fees By Sports Material (sale of 2nd Hand Material) By Entertainment 1,05,000 12,000 2,400 14,000 1,33,400 1,33,400 Additional information 1/04/2023 31/03/2024 Cash at bank 60,000 - Stock of sports material 30,000 - Tournament Fund (after deducting tournament expenses of 14,000) - 6,000 Donations for club Building - 1,40,000 Subscription Due 10,000 15,000 Stationery Stock 4,000 - Stationery was depreciated by 25% and Sports material by 50%, [Jan. 2025, 10 Marks]
Statement of Affairs and Balance Sheet.
Single Entry System & Double Entry System
In net worth method profit or loss of the business is calculated by preparing trading and profit & loss account.
As per Companies Act, 2013, a company may prepare its records under single entry system.
Closing Capital means Opening Capital + Additional Capital + Drawings Profit.
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