Justify, whether books maintained by the single entry system is reliable as the books maintained by the double entry system.
Asked by Topperlearning User | 4th Jul, 2016, 08:16: AM
Double entry system of accounting records both aspects of a transaction. Hence it is able to provide accurate information as to profit, liabilities and assets. While single entry system of accounting does not record all transactions in certain cases. Sometimes it records both aspects but still only in some aspect. So, single entry system is less reliable than double entry system of book keeping.
Answered by | 4th Jul, 2016, 10:16: AM
- What is Single Entry System?
- Rupesh started a firm on1st April, 2015 with a capital of Rs.10,000. On 1st July 2016 he borrowed from his son Mr. Rohit a sum of Rs. 4000 @ 9% p.a. (interest not yet paid) for business and introduces a further capital of his own amounted to Rs. 1500. On 31st March, 2016 his position was as follows Cash Rs.600, stock Rs.9,400, debtors Rs.7000 and creditors Rs.6000. Ascertain his profit or loss taking into account Rs.2000 for his drawings during the year.
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