Question

When is a business said to be using a single entry system?

Answer 1

A business is said to be using single entry system if it is not completely following the principles of double entry system of book-keeping.

Single entry system may consist of double entry system in respect of certain transactions such as cash received from debtors, cash paid to creditors etc. It may consist of single entry in respect of certain transactions such as cash sales, fixed assets purchases etc.

Sometimes, in single entry system, there is no entry in respect of certain transactions such as depreciation, bad debts etc.