INTRODUCTION

Single-entry and double-entry bookkeeping also known as single-entry and double-entry accounting
are both methods of record-keeping for companies’ financial transaction data. We’ll look at
everything we need to know about these two modalities of bookkeeping. Firstly, we’ll talk about the
single-entry bookkeeping; Secondly, about the double-entry bookkeeping and thirdly, we’ll see the
advantages and the drawbacks of these two methods.

SINGLE-ENTRY BOOKKEEPING

 Definition: Single-entry bookkeeping is a method of tracking a company’s assets, liabilities,

income, and expenses by recording each transaction one single time, single-entry
bookkeeping only uses one account per transaction. As its name suggests, it lists income and
expenses in a single row, with positive values for income and negative values for expenses.
The single-entry bookkeeping method is sometimes also referred to as single-entry
accounting. It is sometimes also conflated with the term ‘cash basis accounting.

 The features of single-entry bookkeeping :

1. No fixed rules: The single entry system of bookkeeping has no fixed set of rules, no
standard rules or principles applicable for determining the profit and preparing the
different financial statements. Thus there is complete freedom of choice and action.
2. Economical: Single-entry accounting is the most economical and time saving method of
recording financial transactions. In this system, high-paid professional or complicated
software is not required for recording the financial transactions.
3. Cash Book: Under the single entry system of bookkeeping, the cash book is maintained
for recording the cash receipts and payments of the business during a given period. Only
one cash book is maintained in which both the private and business transactions are
included.
4. Personal Account: The single entry system maintains the personal accounts of all the
creditors and debtors to determine the amount of credit purchases and sales.
5. Estimation of Profit or Loss:The profit or loss of the business is estimated out of the
information available at hand. Thus, the exact profits or losses are not ascertained.
6. Final Accounts: It is tough to prepare the final accounts in the single entry system of
bookkeeping as the real and nominal accounts information are not available. The figures
of liabilities and assets are calculated from the information at hand, but they are
estimates. Hence, the Statement of Affairs is prepared instead of the Balance Sheet.
7. Original Vouchers: Vouchers refer to documents specially prepared for recording the
transactions. A separate voucher is prepared for every transaction, and it specifies which
account is to be debited or credited.

 Who use the single-entry bookkeeping?

single-entry bookkeeping is not suitable for all types of businesses. The single-entry
bookkeeping is used by the small business with low transactions. This
system is preferred for convenience because it doesn’t require high-paid
accoutant, it’s a simple and low cost.