Meaning of single entry book keeping :
Single entry system means a system of accounting by making single entries of accounts in debit or credit side and not the same transaction in both sides of debit and credit as is prevalent in double entry system.
Single entry system is called as an incomplete system of accountancy by modern accountancy experts or accountants. But that statement is not correct. Single entry accountancy has been in vogue in India in the Bahi khatas (journals) and the khata bahis (ledger books). It is also erroneous to state that the State of a business house cannot be known by the single entry system as swiftly as by the double entry accountancy which may be known by the special features of accountancy under this system.
Special features of accountancy by single entry system.
1) It is the original and simplest form of book keeping and accountancy.
2) It is the system of book keeping for private as well as a business man or professional.
3) It does not require any special training in accountancy. Even a lay man can keep and maintain his accounts for his own knowledge as to his financial position and daily requirements or necessaries, comforts and luxuries and can even submit his income tax return which has been made compulsory by the income tax laws if he falls under any of the categories which have burdened the layman even to submit his income tax returns even though he does not earn a taxable income. (See Also.. Importance and utility of Book-Keeping.)
4) Just as ignorance of the common man has been beneficial to Advocates, medical practitioner and the police department, similarly, the common man have fallen a prey to income tax department for harassment and undue expenses for no fault of theirs. In such circumstances common men can prepare their returns themselves without the assistance of specially skilled accountants, or maxims or income tax practitioner.
5) In single entry system all transactions are noted in a day book, diary or journal in its proper form. Whatever is or comes is an cash in entered on the left side of the journal or Bahikata such as cash in hand b/d Rs. ---, or received from B as rent of house or shop Rs. ---and under this nothing the ledger folio or khata is noted, such as "By Tenant B's A/c" only and repeating the money of rent advanced. On the right side of the journal all expenses or givings of money are noted such as "to home account----Rs.---" under it "by cash A/c" is to be noted without repeating the amount of money again.
6) At the foot of the journal the Money amounts of both sides are totalled and the balance, debit or credit is brought forward to the next page. The difference between debit and credit is readily known earlier than it is found by double entry system.
7) In the ledger folios or khatas all the transactions are noted below each item of debit and credit side are posted and in each ledger folio also the position of the khata is more easily known than it comes to one's knowledge by double entry system. (See Also... Advantages of Double entry Book Keeping)
8) The Bahikhata (Journal or day book or cash book) and khata Bahis (Ledger Books) have been in use by businessman in India since times immemorial an even these days one may see a business man's trader with his Indian Bahi khatas and khata Bahis, which may be taken as a proof of the popularity of single entry system.
Post a Comment