Match each term or feature related to the single entry system of bookkeeping on the left with its appropriate accounting description or limitation on the right.
- Pure Single Entry SystemA practice where only personal accounts of debtors and creditors are maintained, with no cash book or real accounts.
- Quasi Single Entry SystemA practice where personal accounts, a cash book, and supplementary daybooks are maintained despite lacking full double entry.
- Statement of AffairsA financial summary compiled from incomplete records to estimate capital in the absence of a proper balance sheet.
- Omission of Nominal AccountsA fundamental limitation that prevents the direct preparation of a traditional Trading and Profit & Loss Account.
Answer
Pure Single Entry System matches with the practice where only personal accounts of debtors and creditors are maintained, with no cash book or real accounts. Quasi Single Entry System matches with the practice where personal accounts, a cash book, and supplementary daybooks are maintained despite lacking full double entry. Statement of Affairs matches with a financial summary compiled from incomplete records to estimate capital in the absence of a proper balance sheet. Omission of Nominal Accounts matches with a fundamental limitation that prevents the direct preparation of a traditional Trading and Profit & Loss Account.
Each single entry component is accurately paired with its definitive feature or limitation: Pure Single Entry is restricted solely to personal accounts; Quasi Single Entry incorporates cash books and subsidiary books; Statement of Affairs acts as an asset/liability capital estimation tool; and Omission of Nominal Accounts is the core structural cause preventing normal income statement preparation.
Step-by-Step Solution
Key Concept
Meaning, Features, and Limitations of Single Entry System