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 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 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 an expanded form of a check register, with columns in which to record the particular sources and uses of cash, and room at the top and bottom of each page in which to show beginning and ending balances. An example of a cash book is:
| Nbr |
Date |
Description |
Revenue |
Expense |
Inventory |
Payroll |
|
|
Balance forward |
Rs. 31,000 |
Rs. 13,000 |
Rs. 4,700 |
Rs. 8,500 |
| 1000 |
6/15 |
Utilities |
|
400 |
|
|
| 1001 |
6/18 |
Merchandise |
|
|
11,300 |
|
| 1002 |
6/20 |
Wages |
|
|
|
4,500 |
|
6/21 |
Bank deposit |
13,100 |
|
|
|
| 1003 |
6/22 |
Supplies |
|
1,200 |
|
|
|
|
Ending Balance |
Rs. 44,100 |
Rs. 14,600 |
Rs. 16,000 |
Rs. 13,000 |
Examples of Double Entry
- Purchase of machine by cash
| Debit |
Machine |
Increase in Asset |
| Credit |
Cash |
Decrease in Asset |
- Payment of utility bills
|
| Debit |
Utility Expense |
Increase in Expense |
| Credit |
Cash |
Decrease in Asset |
- Interest received on bank deposit account
|
| Debit |
Cash |
Increase in Asset |
| Credit |
Finance Income |
Decrease in Incomce |
- Receipt of bank loan principal
|
| Debit |
Cash |
Increase in Asset |
| Credit |
Bank Loan |
Increase in Liability |
- Issue of ordinary shares for cash
|
| Debit |
Cash |
Increase in Asset |
| Credit |
Share Capital |
Increase in Equity |
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