Single Entry System and its Features

Single Entry System is a bookkeeping system that is used to record financial transactions in a simple way. It is usually used by small businesses or individuals who do not require a more complex system. Here are the features of the Single Entry System:

1. No Uniformity
The single entry system does not follow any set of rules or principles, making it an unorganized system. It is not a standardized accounting system, and the financial statements produced by this system may not be accurate.

2. Maintenance of Personal Accounts
In single entry system, personal accounts are maintained separately. These accounts include accounts of debtors, creditors, owners, and expenses. It records only the cash and credit transactions, which are entered in the cash book.

3. Maintenance of Cash Book
The cash book is the main record of the single entry system. It records all the cash and credit transactions of a business. Cash book is divided into two sections - cash column and credit column, where cash transactions are recorded in the cash column and credit transactions in the credit column.

4. Suitable for Small Businesses
Single entry system is suitable for small businesses where the volume of transactions is low. It is mostly used by small traders, shopkeepers, and professionals who have a limited number of transactions.

5. Limitations
As mentioned above, single entry system is not a standardized accounting system, and therefore, it has many limitations. It cannot provide accurate financial statements, and it does not provide a complete view of a business's financial position.

Conclusion

In conclusion, the single entry system is a simple and basic bookkeeping system that is suitable for small businesses with few transactions. It does not follow any set of rules or principles and does not provide accurate financial statements. It maintains personal accounts separately and the main record is cash book.