DEFINATIONS ACCOUNTS FROM INCOMPLETE RECORDS - SINGLE ENTRY SYSTEM

Important definition for 2nd year college student of Commerce. Accounts from incomplete Records - Single Entry System.

1. What is single entry system of book keeping.

Single entry system may be defined as a system in which accounting records are not kept strictly according to the double entry system of book keeping.

2. Define double entry system.

Under this system, both debit and credit aspects of all the transaction are recorded.

3. What is simple single entry system.

 Ans: A system in which only cash book is Maintained along with personal account.

4. What do you understand by quasi single entry system.

 Ans: A system in which only personal account of trade debtors and trade creditors are recorded while real and nominal accounts are not maintained.

5. What do you meant by “Statement of affairs”.

 Ans: A statement of all assets and liabilities & capital which is prepared in single entry is called statement of affairs. 

6. What do you meant by ”Opening statement of affairs “.

  Ans: It is prepared to find out the opening capital under single entry system.

7. What do you meant by ”Closing statement of affairs “.

 Ans: It is prepared to find out the opening capital under single entry system.

8. What do you meant by ”Statement of profit and loss “.

 Ans: It is prepared to find out the profit or loss under single entry system.

9. Define the term Drawings.

 Ans: The cash or goods taken away by the proprietor from business for his personal use is called drawings.

10. What will be the capital of the business, if assets are Rs.100000 and liabilities are Rs.40000.

Ans: Rs. 60, 000

11. Write down the formula for determining net profit under net worth method.

 Ans: Net Profit= Closing capital + Drawings – Further capital – Opening capital – Interest on capital.

12. What is stock turnover.

 Ans: Stock turnover mean as number of items the average stock has been turned over during the year.

13. What is conversion method.

 Ans: Under this method first missing information is ascertained and then trading results are calculated in the usual way.

14. Give any two demerits of single entry system.

  1.  It is not possible to obtain accurate information regarding the results of the business operations.
  2. Trial balance can not be prepared to check the arithmetical accuracy of the books.