Question

Under single entry system, there is no provision to make adjustments, while under double entry system, adjustments are made at the time of preparing final accounts.

• A. True
• B. False

Answer 1

The correct option is A True

Preparation of the profit and loss account cannot be prepared through the information assembled through the single entry system. This means that this system cannot help the organization to determine its financial position because there is no provision to make adjustments.

On the other hand, the double entry system of recording financial transactions of the organization is useful in the preparation of trading profit and loss accounts as adjustments are made at the time of preparing final accounts.