We have, so far, discussed Double Entry System; according to which, both the aspects of a transaction are recorded. Another system of recording transactions in the books of account is Single Entry System, under which both the aspects of a transaction may not be recorded. Unlike Double Entry System, in Single Entry System, no set rules are followed—even the books of account to be maintained are not certain. Usually, under this system, the Cash Book and personal accounts of debtors and creditors are maintained; real and nominal accounts are not maintained at all. Since both the aspects of transactions are not recorded, the system is known as Accounts from Incomplete Records or Single Entry System of Accounting. Accounting records that are not maintained according to Double Entry System are known as Accounts from Incomplete Records or Single Entry System of Accounting.

Features of Single Entry System:

(i)               Suitability: This system is suitable for small-size business where the number of transactions is less.

(ii)              No Uniformity: This system may differ from firm to firm as it is a mere adjustment of Double Entry System according to requirements and convenience.

(iii)            Maintenance of Personal Accounts: Usually under this system, only personal accounts are maintained and real and nominal accounts are avoided. Therefore sometimes, it is defined as a system where only personal accounts are kept.

(iv)             Maintenance of Cash Book: Generally, a Cash Book is maintained in this system which mixes up business as well as private transactions. 

(v)             Dependence on Original Vouchers: Usually under this system, original vouchers are scrutinized for collection of information. For example, in case of credit sale, the owner may keep the invoice without recording it in accounting books and at the end of a particular period the total of the invoices gives credit sales of the business.

(vi)            Difficulty in Preparation of Final Accounts: In the absence of all nominal and real accounts in the ledger, final accounts cannot be prepared easily.

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