It is difficult to define single entry system because none exists as such. Single entry system is basically a defective double entry system. Any system that falls short of a proper double entry system is termed as single entry system. Under single entry system personal aspect of the transactions are only recorded, nominal and real aspects are ignored. It is seen, sometimes only one aspect of a transaction is recorded sometimes both are recorded and sometimes none is recorded. For example the ledger only contains the personal accounts of the debtors and creditors, all impersonal accounts like sales, purchases, expenses, etc are not recorded. Summarily, this system doesn’t consider the two fold aspect of the every system.

    The defects of this system can be summed up as:

    • Under this system only partial and incomplete record is kept as the two fold concept is ignored.
    • As the two fold aspect of transactions are not recorded so a trial balance cannot be drawn up to test the arithmetical accuracy of the record.
    • As nominal accounts are not maintained so a profit and loss account cannot be prepared for the want of information regarding income and expenditure.
    • As no real accounts are recorded, the preparation of balance sheet is not possible.

    Single entry system is used by very small organizations. Though it has its draw backs but is surely saves time as compared to double entry system so some large scale organization also use this system. To name one, PTCL uses single entry system of recording.



    ●      It is statement of assets and liabilities (including capital) prepared under single entry system.

    ●      It is prepared partly from trader’s books, partly from other sources of information and sometimes from memory.

    ●      It is compiled from incomplete books and information, the accuracy of which can’t be relied on.


    ●      It is statement of assets, liabilities (including capital) prepared under double entry system.

    ●      It is prepared with data from the books of accounts only.

    ●      It is prepared from a set of books of original entry, arithmetical accuracy of which can be proved and tested.



    Note: the format of statement of affairs is same as the format for balance sheet.