Single Entry Bookkeeping Accounting SystemUnder the double entry system of book-keeping, both aspects
of every transaction are recorded, i.e. one on the debit side and the other on
the credit side. Under the single entry system of bookkeeping, both aspects of
every transaction are not recorded in the books of accounts. Under this system,
the personal accounts of the debtors and creditors are maintained. The usual
subsidiary books maintained under the double entry system of book-keeping are
also maintained under the single entry system, but the postings are made from
these subsidiary books of those entries which affect personal accounts. Real and
nominal accounts are not maintained under this system. Since only one aspect of
every transaction is usually recorded under this system, therefore, the system
1s called 'single entry system'. It should be noted that single entry system is
not any particular system of book-keeping, but rather the double entry system in
an incomplete and disjointed form.
Disadvantages of single entry system 1. Since the two-fold aspect of every transaction is not
recorded in the books of accounts, therefore, the arithmetical accuracy of the
books of accounts cannot be ascertained by means of a trial balance.
2. It is not possible to obtain accurate information regarding the results of business operations, as under single entry system, nominal accounts relating to losses, expenses, gains and incomes have not been maintained. In the absence. of these accounts, necessary classified information required for preparing pr9fit and loss account is not available. Hence profit and loss account cannot be prepared. 3. Information relating to assets and liabilities cannot be reliable because respective accounts have not been maintained. Thus, even balance sheet cannot be prepared. Consequently, true financial position of the business cannot be ascertained. 4. In the absence of various checks, fraud is more easily committed and it is very difficult to detect. Ascertaining profit under the single entry systemUnder the single entry system of book-keeping, it is not
possible to prepare a regular trading and profit & loss account, because no
record is kept of the nominal accounts, therefore, the exact profit or loss for
a particular period cannot be ascertained. The net profit for a particular
period can be ascertained in a rough manner by comparing the financial position
of the business at the commencement of the period with the financial position at
the end of the period. This requires the preparation of two statements of
affairs, one in the beginning and the other at the end.
Opening and closing balances of capitals can be the ascertained by preparing statement of affairs, and comparison of the capitals at the two dates will reveal either profit or loss. Preparation of a statement of affairsA statement of affairs (for this purpose is a document in the
form of a balance sheet, showing on right hand side the amounts (estimated) of
the various assets and on the left hand side the estimated amounts of
liabilities. The difference of the two sides represents capital of the owner
i.e. net worth. .
First a statement of affairs as at the beginning of the period should be prepared. For this, particulars of assets and liabilities as on the date should be collected with the assistance of the owner. The value of the fixed assets (plant, building, machinery, fixtures etc.) should be arrived at as follows-Proprietor will probably remember their original cost and the date of acquisitions from which (cost) appropriate amount of depreciation should be deducted, this will give 'written down value' of such assets which should be included in the statement of affairs. Stock taking should be done physically; lists be prepared and valuation to be done adopting cost or market price whichever is lower. Bank balance can be ascertained from the pass book or statement of account supplied by the bank. Cash can be physically counted. Debtors and creditors can be ascertained from the personal ledger. As already stated, excess of assets over liabilities represents capital. After preparing statement of affairs, both at the beginning of the period and at the close of the period the profit or loss (for the period) is ascertained by comparing the capital at the end of the period with that at the beginning. Adjust the capital at the end by adding drawings there to and deducting there from fresh capital introduced. |
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Note for International VAT USers and GST Users in India
Many business use services of Tax Consultants and Chartered Accountants for filing the Tax Return and the tax return of the software is not used. To assist such activity you can export all reports from the software to MS Excel or MS Word and submit it to your tax adviser for financial figures for the business . The software will perform all Inventory Control, Vouchers, Nominal Ledger Accounts along with Working/Trading and Profit & Loss account that will give you all figures ready for export for filing Tax Return. As soon as you are sure about the changes you want in the visual interface and printing regarding your GST requirements we will modify the software software as per your GST requirements. To get any of the off-the-shelf software modified for visual interface and printing please Contact Us Now. We will carry out all required customization for GST as per your requirements in the existing software in professional and timely manner . For any required customization as per GST in any of the off-the-shelf software, please contact us now. We will carry out required customization for GST as per your requirements in the existing software at nominal additional charges. Give us details of required customization for a man-hour or work estimate. For official reference to GST refer to following links:GST (Goods and Service Tax) Circular by Central Board of Excise and Customs (CBEC), Department of Revenue, Ministry of Finance, Government of India. Finance Act 2016 of Government of India HSN codes for Goods and Service Tax (GST) in India Central Board of Excise and Customs - HSN Codes Circular by CBEC, Government of India - About HSN Codes.
Central Goods and Services Tax (CGST) Rules, 2017 Draft government Approved Format Under Goods and Services Tax - Invoice Rules What is GST Compliant Business? What are the specific mandatory fields in an GST compliant invoice? Why the invoice an important financial instrument? What are Registered and Un-Registered Dealers? There is a lot for your business to catch up on those links along with online tax filing and registration for trading. Give us the details of required work you want in the off-the-shelf VAT accounting system and we shall make it GST compliant invoicing and accounting for your business at nominal additional charges. Cheers. Happy Accounting. If you want to know the details of for making VAT/CST system compliant to GST system: Standard rate of $15 per man hour shall be applicable for making any of off-the-shelf VAT based accounting software systems into CGST/SGST Compliant Accounting. Give the details of customization required in any of our off-the-shelf VAT accounting systems made for various business to get a quote of additional charges. See demo of software on website. See official Indian Government CGST/SGST Specification on the panel above here. Click for more information on Value Added Tax (VAT). Free Download of Full Featured Software - Try Full Featured Software Before Order - Time Limited 30 days Full Featured Version of these software are available for download from our website www.freeaccounting.in. HiTech Billing, Accounting Software Off-the-Shelf versions are available for Business, Traders, Industry, Hospital, Hotel, Petrol Pump, Medical Store & Distributor, Automobile or Motorcycle Dealers, Newspaper or Magazine Publishers, VAT Accounting & Billing and Commodity Brokers. | ||||||
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