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Single Entry System 📓

Scenario:

  • Raju runs a small Paan Shop.
  • He doesn't know Debit or Credit.
  • He just writes in a diary: "Sold ₹500 today", "Paid ₹200 for milk".
  • He maintains only Cash Book and Personal Accounts of debtors/creditors.
  • This incomplete system is called Single Entry System.

Definition: "A system of book-keeping in which, as a rule, only records of cash and personal accounts are maintained, is always incomplete double entry. It is often called Single Entry System." - Kohler

Characteristics 🌟

  1. Incomplete: It does not record both aspects (Debit/Credit) of all transactions.
  2. Personal Accounts Only: Real and Nominal accounts (Assets, Expenses, Incomes) are usually ignored.
  3. No Trial Balance: Since debits don't equal credits, you cannot prepare a Trial Balance.
  4. Variation: Different people follow it differently (Pure Single Entry vs Quasi Single Entry).
Double Entry"Records Debit AND Credit. Complete."
↓
Single Entry"Records only One aspect (or sometimes none). Incomplete."
Is it a System?

Strictly speaking, Single Entry is NOT a system. It is a lack of system. It is just a mix of double entry, single entry, and no entry.

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. Single Entry System is best suited for:

Large Companies
Small Sole Traders
Government
MNCs

💡 Final Wisdom: "It's quick, cheap, and easy. But when the Taxman comes, you will regret not having a Double Entry system!" 👮‍♂️

Next up: Single Entry vs Double Entry - The Battle! ⚔️

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