Single Entry Accounting

Single entry accounting is a part of CS accounting syllabus. It means to record one side of entry. Suppose, we sells our furniture, we have not to record furniture sale but we just record total cash received from furniture. So, in single entry accounting, we records cash, account receivables, account payable. No need of recording of other assets, expenses and revenues in this single entry of accounts. So, it is imperfect system of accounting. Double entry system of accounting is 10 times better than this single entry account system. Very small business firms who want to save money from appointing an professional accountant, are using single entry accounting system. For calculating net profit for a particular period in this method, they compare  the financial position of the business at the commencement of the period with the financial position at the end of the period.

All those who are using this system of accounting will be unable to detect the frauds. We can n't make trial balance in it. So, we will not able to calculate mathematical accuracy in this system of accounting. We can not also track the items which are not recorded in single side because there is not provision for passing adjusting entries. I explain it with following example.

Suppose 10% our debtors have decided not to pay in the end of this year. It is our loss in the form of bad debt but single entry accounting do not allow this event to record because neither it is cash item nor it is debtor or creditor.

Now, all businessmen who want to change single entry accounting into double entry accounting can change it by taking the help of professional accountant who verifies its all assets by checking physical existence and record them at their market value and start to pass new transaction according to double entry system.