Incomplete Records (Single Entry): Meaning/Definition - SS2 Accounting Lesson Note

Incomplete records, also known as single entry bookkeeping, is a system of accounting where only a few financial transactions are recorded. In this system, only one side of the accounting equation is recorded, which is usually the cash account. This means that important financial information, such as accounts payable, accounts receivable, and inventory, are not tracked.

In single entry bookkeeping, transactions are typically recorded in a simple cash book that records all cash receipts and payments. The cash book shows the balance of cash on hand at the beginning and end of the accounting period, as well as the total cash received and paid during the period.

Single entry bookkeeping is often used by small businesses, sole proprietors, and individuals who have simple financial transactions. It is a basic system that requires little training and can be easily understood by non-accountants. However, it may not provide the level of detail required for accurate financial reporting and analysis.

Incomplete records may also result in errors and inaccuracies, which can lead to financial losses and legal issues. Therefore, it is important to keep accurate financial records, regardless of the size or complexity of the business.