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November 18, 2023 Site Archive

Accounting Books
What is a Single Entry System?
College Textbooks
A single entry system records each accounting transaction with a single entry to the accounting
records, rather than the more common double entry system. The single entry system is centered Finance Books
on the results of a business that are reported in the income statement. The core information
tracked in a single entry system is cash disbursements and cash receipts. Asset and liability Operations Books

records are usually not tracked in a single entry system; these items must be tracked separately.
The primary form of record keeping in a single entry system is the cash book, which is essentially CPA Exam Study Guides

an expanded form of a check register, with columns in which to record the particular sources and
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uses of cash, and room at the top and bottom of each page in which to show beginning and
to receive monthly course
ending balances. An example of a cash book is as follows:
discounts
(required)
Nbr Date Description Revenue Expense Inventory Payroll
Balance forward $41,000 $23,000 $5,700 $8,500
1000 6/15 Utilities 400
1001 6/18 Merchandise 12,300
1002 6/20 Wages 4,500 SUBMIT
6/21 Bank deposit 13,100
1003 6/22 Supplies 1,200
Ending Balance $54,100 $24,600 $18,000 $13,000

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12/26/23, 3:39 PM Single entry system definition — AccountingTools

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Advantages of a Single Entry System

The main advantage of a single entry system is its absolute simplicity. It requires a minimal
number of entries, and a low knowledge of accounting standards. This makes it easy for a non-
accountant to use. In addition, it can be used to derive the profits generated by a business in
short order.

Disadvantages of a Single Entry System

The most significant problems associated with a single entry system include the following:

• Assets. Assets are not tracked, so it is easier for them to be lost or stolen.

• Audited financial statements. It is impossible to obtain an auditor’s opinion on the financial

results of a business using a single entry system; the information must be converted to a
double entry format for an audit to even be a possibility.

• Errors. It is much easier to make clerical errors in a single entry system, as opposed to the
double entry system, where the debit and credit totals for separate entries to different
accounts must match.

• Liabilities. Liabilities are not tracked, so you need a separate system for determining when
they are due for payment, and in what amounts.

• Reporting. There is much less information available upon which to construct the financial
position of a business, so management may not be fully aware of the performance of the
firm.

Single entry systems are strictly used for manual accounting systems, since all computerized
systems utilize the double entry system instead.

It is generally possible for a trained accountant to reconstruct a double entry-based set of

accounts from single entry accounting records, though the time required may be substantial. By
doing so, you can then reconstruct the balance sheet and statement of cash flows.

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