Under a single-entry bookkeeping System, we maintain only cash and private accounts. On the other hand, real and nominal accounts are completely ignored. In other words, we can say that following the only Entry System, we don’t prepare subsidiary books (such as Purchase Day Book, Sales Day Book, Purchase Returns, and Sales Returns Book) and ledgers accounts. Often accountants regard a single-entry bookkeeping System as an unscientific method of maintaining records because the practice that’s followed during this system is unsystematic and unorganized. The Main Advantages of a Single Entry System are
Advantages of Single Entry System
Easy to Maintain: This method of recording transactions is very simple. This is because no expert knowledge of accounting is required to maintain books.
Economical: This system is less expensive in comparison to the double-entry system of accounting as there is no need to hire a specialized accountant for maintaining accounting records.
Suitable for Small Businesses: This system is particularly suitable for small business organizations that do not account for a large number of transactions.
Less Time-Consuming: It is less time-consuming as only a few books are to be maintained.
Flexible: As the rules of the Double Entry System are not strictly followed, so, it can be easily adjusted or changed as per the requirement of the proprietor.
Simple to Compute Profits or Losses: The computation of profits or losses under this system is very simple. This is done merely by comparing the capital at the end with that of capital in the beginning.
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Double Entry System
Under the double-entry system, there are two aspects of every transaction i.e. debit and credit. So, both aspects of each transaction are recorded.
Meaning of BookKeeping
The meaning of bookkeeping is often found within the term itself. This implies keeping the records of business transactions within the original books of accounts of the business.