7.

Adavantages and disadvantages of single entry system:

The single entry accounting system deals with cash receipts and
payments. The accountanat only records the transactions once.
There is no debit and credit side like the double entry system.
Advantages:
1.it is easy to understand and it is easy to maintain and keep it on
its track.there is no fixed set of principles associated with single
entry system so it is easy to implement.
2.it is an economical system for implementation as it does not
require skilled staff and professional accountants for hiring them
to do the accounting procedures for the company. In addition to
that large number of books are also not required to record the
financial transaction in single entry system.
3. in single entry system it is easy to calculate the profit. The
amount of loss and profit for a particular period can be calculated
by calculating the difference between the opening and the closing
balance of the period.
Disadvantages:
1.single entry lacks a set of rules governing how it is used.
2.this system is also prone to errors and miscalculations.
3.in a way,single entry is an incomplete system because it doesn't
have a credit and debit side.

8.Advantages of double entry system:

The following are main advantages of double entry system:
1.under this method dual the aspects of each and every
transactions are recorded.so it is possible to keep complete
account.
2.since both the aspects of a transaction are recorded,for each
debit there must be corresponding credit of an equal amount.
Therefore,total debits must be equal to total credits.
3.under this system profit and loss accounts can be prepared easily
by taking together all the accounts relating to income or revenue
and expenses or losses and thereby the result of the business can
be ascertained.
4.A balance sheet can be prepared by taking together all the
accounts relating to the assets and liabilities and thereby the
financial position of the business can be assessed.
5.in this system necessry statistics are easily available so that
management can take appropriate decision and run the business
efficiently.
6.under this system mistakes and deflections can be detected.
7.All the necessry details about a transaction can be obtained
quickly and easily.
8.Total amount owned by debtors and total amount owed to
creditors can be ascertained easily.

9.Objectives of accounting:
The objectives of accounting can be given as follows:
1.systematic recording of transactions[book-
keeping:journal,ledger,trial balance]
2.Ascertainment of results of above recorded transactions
[manufacturing,trading,profit and loss account]
3.Ascertainment of the financial position of the business [balance
sheet]
4.providing the information to the users for rational decison-
making[financial reports]
5.To know the solvency position

10.Dual aspects concept:

The concept is the core of double entry book-keeping. Every
transaction or event has two aspects:
1.it increases one assets and decreases other assets.
2.it increses an assets and simultaneously increases liability.
3.it decreases one assets,increases another assets.
4.it decreases one assets,decreases a liability
Alternatively:
5.it increases one liability and decreases other liability.
6.it increses an liability and simultaneously increases an assets.
7.it decreases liability,increases other liability.
8.it decreases liability,decreases an assets.

11.Entity concept:
Entities concept states that business enterprise is a separate
identify apart from its owner.
Accountants should treat a business as distinct from its owner.
Business transaction are recorded in the business books of
accounts and owner's transaction in his personal accounts.
The practice of distiguishing the affairs of the business from the
personal affairs.
This basic is applied to all the organisations whether sole
proprietorship or partnership or corporate entities.
Entity concept means that the enterprise is liable to the owner for
capital investment made by the owner.
Since the owner invested capital,which is also called risk
capital,he has claim on the profit of the enterprise.
Ex: Mr.x started business investing Rs.700000 with which he
purchase machinery for Rs.500000 and maintained the balance in
hand.
Capital: Rs.700000
Machinery: Rs.500000
cash: Rs.200000
Now if Mr.x spends Rs.5000 to meet his faimily expense from the
business fund,then entity concept revised financial position would
be:
Capital: Rs.700000
less:drawings-(Rs.5000)
Rs.695000
Machinery: Rs.500000
Cash: Rs.95000
12.Basis of accounting:
This deals with the timing of the revenue recognition,i.e. When
should the revenue be recognised in the books of accounts.
There are two approach of accounting:
1.cash basis of accounting
2.accural basis of accounting

1.cash basis of accounting:

This is the simpler,uncomplicated approach.Under the cash system
of accounting an income will only be recorded when it comes
in.so an income will be earned when it is received in cash by the
organisation.And similarly,the expense will also be recorded only
when they are actually made.
So take for example the organisation pays the salary of its
employees for the month of june on the 3rd of july.this salary
expense will thus be recorded in july,although the expense is for
the period of june.

2.Accrual basis of accounting:

Accrual basis is the ,ore logical and scientific approach to
accounting. This is the method most organisation choose to
adopt,as it gives a more fair representation of the financial
position of the company.
In accrual system,all incomes and expenses are recognized in the
time of period in which they occurs,not when the money actually
comes in.so the income will be recorded if it is earned
irrespectives of whether the payment has come in or not.And the
expenses is recorded when it becomes due,irrespective of whether
it has been paid.
So in accrual system,all income and expenses-cash items and non-
cash items will be taken into account.And the final accounts will
be a true representation of the organisation's financial position.
13.Branches of accounting/types of accounting:
the various branches of accounting are:
1.financial accounting
2.management accounting
3.cost accounting
4.social responsibility accounting
5.human resources accounting
6.tax accounting
7.forensic accounting
8.fiduciary accounting