Single entry system

Single entry system is a system of book keeping in which accounting records are not kept according to double entry principle of book keeping. It is also called Accounts from Incomplete Records. This system differs from firm to firm, as it is a mere adjustment of double entry system according to requirement. Under this system, only personal accounts are maintained. Limitations of single entry system are that it is incomplete and unscientific method. The profit or loss in this system of accounting is ascertained with the help of Statement of Affairs Method or Conversion Method. To ascertain profit, according to the Statement of affairs method, it is necessary to prepare a statement of affairs at the end of the year and also at the beginning of the year, if not already prepared. The difference between the opening capital and closing capital is the profit earned during the year. In case of single entry system, profit is also computed by adding drawings during the year to capital at the end and deducting additional capital and capital at the end from it.