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Single Entry & Incomplete Records

The document discusses single entry and incomplete records in accounting, highlighting that these occur when business transactions are not fully analyzed or recorded. It outlines the importance of maintaining proper books of accounts to minimize fraud, aid decision-making, and facilitate tax computations. Additionally, it identifies reasons for incomplete records, such as lack of appreciation for accounting, inadequate personnel, and natural disasters.

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128 views2 pages

Single Entry & Incomplete Records

The document discusses single entry and incomplete records in accounting, highlighting that these occur when business transactions are not fully analyzed or recorded. It outlines the importance of maintaining proper books of accounts to minimize fraud, aid decision-making, and facilitate tax computations. Additionally, it identifies reasons for incomplete records, such as lack of appreciation for accounting, inadequate personnel, and natural disasters.

Uploaded by

Amos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

BSA 2: NOTES ON SINGLE ENTRY AND INCOMPLETE RECORDS

1. What are Single entries and incomplete records?


Is a situation where business transactions are not analysed and or recorded
following the accounting process. Incomplete records mean some
transactions were omitted.
For example: Sale of goods worth 10 million to a customer. Cash 3m, by
cheque 3m, the balance to be paid later.
Cr. Sales a/c 10 m
Dr. Cash a/c 3m
Dr. Bank a/c 3m
Dr. Account’s receivables 4m
Double entry; Identify the effect, recognise or identify the accounts which
are
affected, assign DR or CR (normal balance).
Read about: what are the features or characteristics of a single-entry system.
2. What are the reasons for having proper books of accounts?
 Through proper accountability, fraud and embezzlement of funds is
minimised.
 Planning and meaningful decision making is achieved.
 It enables the measurement of an organization’s performance (profits/
losses).
 It eases the computation of taxes by the tax body (Uganda Revenue
Authority) i.e., Corporation tax 30%; Presumptive tax, Rental, withholding
tax, PAYE, etc.
 Financial statements act as evidence of an entity operating - used by
lenders or financial institutions/funders.

3. Why do organizations have incomplete records?


 Small business owners do not appreciate the value and role of accounting.
 Inadequate accounting personnel (number of accountants)
 Lack of professionalism (code of conduct or ethics as per ICPAU or IESBA-
integrity, independent, confidentiality, professional due care and
competence)
 High costs of accounting personnel
 Occurrence of the natural disasters which could destroy or adversely affect
the accounting
records, for example floods, fire by lightening, volcanos which erupt,
landslides among
others.
 Disappearance of accounting records could be intentional, theft,
negligence (data loss) by
the accounting staff.
Read about: a) Small and medium businesses usually face a challenge of
incomplete records.
Explain how this challenge can be dealt with by these businesses.
4. Two (2) Techniques of ascertaining business profits;
 Use an accounting equation
 Prepare a statement of profit or loss

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