Record transactions and accounts.

We have much kind of methods to records the transactions and maintained the accounts. That business was use some methods to do it they are, y y y All the type of purchases are record in the book. They maintain the creditors ledger to record their informations and day to day transactions. All expenses are record in the book.

 Water bill.  Electricity bill.  Purchasing bills.  Telephone bills.  Other expenses bills

In this organization the only thing they are doing is book keeping. Bookkeeping is an essential thing when we think about real situation in a business. Book keeping helps lot to maintain the true and fair view.

When we get large organizations they use the so many systems to do these transactions they are profit and loss accounts, ledger accounts, balance sheets, petty cash book, income statements and many more.

In medium size businesses are used the double side entry system but in that businesses are used the single side entry system. Its very easy way to control their accounts. And they used the separate books to record their sales reloads are record in one book. And other types of sells are record in one book.

Advantages of this system.

They use the simple type of accounts to records there transactions so they can easy to find there day to day sales and day to day expenses.

In busy times the employees can quickly records their accounts because this is a manual system so they can satisfied the customers. Because they can give their service without any delay.

They can easy to calculate the loss and profit in their business.

This is a small type business so they do not pay any tax to the government so that system is very useful to this business.

Disadvantages of this system.

Sometimes they forget to write the transactions in those books.

Sometimes they record the wrong values in those books.

This is the manual type accounting system so sometimes they cant calculate the right profit or loss.

Legally government does not accept that type of accounting systems because they hesitate that system has more errors.

In any case if they lose their entry book they cant get there previous transactions or any details of that. Because this is the only way of record there information.

After keeping daily records as the above, they calculate their profits at the end of each month. The way they calculate their monthly profit or loss is below.

Total sales of the month Electricity bill Water bill Purchases Employee salaries Telephone bill Withdraws Loan interest Total expenditures per month Profit per month xxx xxx xxx xxx xxx xxx xxx

xxxx

( xxxx ) xxxx

Advantages and Disadvantage of the single entry book keeping

Advantages y Simple and easy to understand

The book keeping system has a single entry system. The system can understand simple and easy. And it is easy to maintain as principals to fellow while recording financial transaction.

Easy to calculate profit and loss

Under this single entry system the profit and loss amount can be calculate easily. The amount of profit or loss about the period can be determined by amount of closing capital and opening capital.

Economic benefits

Record this financial transaction. It does not want to require higher educational and skilled accounting The S. N. S Engineering Service use the single entry system is an economical system to recording personal to record this transaction. It does not want large number of books, journals to financial transaction.

Cannot defalcate and cheat

The all transaction are recording others cant defalcate money and cheat owner of the business organization.

The book keeping system suitable for small business.

The entry system is simple and easy system. This system is suitable for small business organization. Small business organizations are not required to maintain their books of account under double entry system.

Disadvantages of that system.

Data may not be available to owner of the business for effectively planning and controlling the business.

Lack of systematic and precise bookkeeping may lead to inefficient administration and reduced control over the affairs of the business.

Single-entry records do not provide a check against clerical error, as does a double-entry system. This is one of the most serious defects of single-entry systems.

Single-entry records seldom make provision for recording all transactions. In addition, many internal transactions, such as adjusting entries are often not recorded.

Because no accounts are provided for many of the items appearing in both the Income Statement and Balance Sheet, omission of important data is possible.

In the absence of detailed records of all assets, lax administration of those assets may occur.

Theft and other losses are less likely to be detected.

I think all the businesses should be used the double entry accounting system. Its very useful system to all businesses.

The double entry system is the nearly universal practice in bookkeeping and accounting, by which each financial transaction causes at least two changes in the accounts. A credit entry in one account causes an equal magnitude debit entry in another account. The practice of using two account entries for every transaction in this way serves two purposes:


Double entry plays an error-checking role. The sum of all debit entries in the account ledgers must equal the sum of all credit entries. A mismatch in these two totals is a signal that a bookkeeping error has been made.

Double entry serve to maintain the "balance" in the so-called accounting equations:

Assets = Liabilities + Owners Equity And Debits = Credits Keeping the company's accounts and maintaining the balance in these equations, in turn, means that the organization's balance sheet or, statement of financial position provides an accurate basis for assessing the company's financial situation.

Examples for double entry system. Debit (DR) Entry ... Asset account Liability account Increases (adds to) account balance Decreases (subtracts from) account balance Equity account Decreases (subtracts from) account balance Revenue account Decreases (subtracts from) account balance Credit (CR) Entry ... Decreases (subtracts from) account balance Increases (adds to) account balance Increases (adds to) account balance Increases (adds to) account balance

Expense account

Increases (adds to) account balance

Decreases (subtracts from) account balance

Advantages and Disadvantages of double entry system

A check against a bookkeeping error including theft are automatically provided when transactions are recorded and the total amount of debit entries equals the total amount of credit entries.

The preparation of financial statements can be created with ease due to the accurate and continuous calculation of profit (credit) and loss (debit). With both entries recorded (sales and purchases) you can track who owes the company money and who the company owes money to more easily.

The company's financial position is clearly illustrated and can be accessed quickly for effective business planning.

With a higher degree of required entries, double-entry bookkeeping has a strict approach creating detailed records of all assets so that your company doesn't lose track of any income.

Double-entry bookkeeping takes internal transactions such as entry adjustment into account which provides more accurate information at the end of the fiscal year.

Omission of important data is never a problem because each transaction is recorded twice in two separate columns.

With using this system business can work properly. Problems are decrease there working ability will goes up and they can earn more profits. By using this system owners can get right decisions in right time, and they can foresee the right situation in the company. So I think this kind of accounting systems are more useful to owners to grownups their business.