SS2 First Term Financial Accounting Lesson Note – Single Entry and Incomplete Records

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WEEK 9                                                                    

TOPIC:          SINGLE ENTRY & INCOMPLETE RECORDS

CONTENTS:

1. Meaning of single entry
2. Limitations of single entry
3. Book-keeping rules for single entry
4. Preparation of statement of affairs
5. Preparation of profit and loss

Sub-Topic 1: MEANING OF SINGLE ENTRY

This is a system of book keeping which does not conform to the basic principles of double entry. The records kept by the record keeper are not complete or inadequate; hence the accountants have to use their ingenuity to prepare the accounts from the available information. Incomplete records present a large amount of unsorted information.

Features

1. Final accounts are prepared by comparing financial data of two or more years
2. Accounting information is grossly inadequate
3. Mostly, records are kept on loose sheet or only cash book is kept
4. There is no accounting system in such an organization

Limitations of single entry

1. It does not conform to the principle of double entry
2. The flexibility of the double entry principle is lacking
3. It is difficult to obtain accurate information since the records are not complete
4. It is difficult to arrive at the profit for the year

Book keeping rules for single entry

1. The opening statement of affairs will be prepared to show the opening capital
2. Adjust the capital by adding any additional capital contributed either in cash or assets and deduct drawings either in cash or goods

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