vastly more widespread 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 ba lances. An
example of a cash book is:
Nbr
Date
Description
Balance forward
1000
6/15
Utilities
1001
6/18
Merchandise
1002
6/20
Wages
6/21
Bank deposit
6/22
Supplies
1003
Revenue
Expense
Inventory
Payroll
$41,000
$23,000
$5,700
$8,500
400
12,300
4,500
13,100
1,200
Ending Balance
$54,100
$24,600
$18,000
$13,000
The most significant problems associated with a single entry system include:

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 audit 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 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
business.
Single entry systems are strictly use 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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