Lecture 122 m 22 s
Small traders do not maintain complete accounts as in double entry system. Instead they keep accounts or books with incomplete records.
Normally to prepare accounts, in Trading units/ Business units they are given two effect for all economical transactions. By this, all accounts are prepared in a business by double entry accounting method. Some small traders like hawkers, sole traders, small shopkeepers or small retailers do not keep the accounts completely as per double entry accounting system, because their utility of keeping the books of accounts is very limited - for instance knowing what the profit or loss is, how much cash balance is there at the end of the day or month, etc. So double entry effect is not given to every transaction. For some transactions, they give only one effect in the books as per requirements.
Thus, small traders keep accounts or books with incomplete records. These accounts are known as Accounts from Incomplete records, or as single entry system.
In this course:
+ Meaning, characteristics and uses of single entry system
+ Limitations of single entry system
+ Difference between single entry and double entry system
+ Calculation of Profit of Loss under single entry system of accounting
+ What is statment of affairs?
+ Difference between statement of affairs and balance sheet
+ Specimen of statement of affairs
+ Ascertainment of profit or loss by capital comparison method (Statement of Affairs Method)