Features of Single Entry - SS2 Accounting Lesson Note

Single entry is a basic bookkeeping system where each financial transaction is recorded only once, either as a debit or a credit. This method is usually used by small businesses and individuals with a low volume of transactions, as it is simple and easy to maintain. Some key features of single entry include:

• One-sided entries: In single entry, each transaction is recorded only once, either as a debit or a credit. This means that there is no double entry system like in the more complex accrual accounting.

• Limited information: Since single entry only records one side of a transaction, it provides limited information about the financial position of the business. It does not provide detailed information on assets, liabilities, equity, or revenues and expenses.

• Simple: Single entry is simple and easy to maintain. It does not require extensive knowledge of accounting principles and can be done manually or with basic accounting software.

• Incomplete: Single entry is incomplete as it does not provide a complete picture of the financial transactions of a business. It may not provide enough information for tax purposes or for obtaining loans from banks.

• Not suitable for large businesses: Single entry is not suitable for large businesses with many transactions as it does not provide enough information for decision making and financial analysis.