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Discuss the Merits and Demerits of Single Entry Bookkeeping and Incomplete Records and Give Reasons That Justify Its Existence Regardless of Its Short Coming: Essay

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Discuss the merits and demerits of single entry bookkeeping and incomplete records and give reasons that justify its existence regardless of its short coming:




Single entry and incomplete records refers to a situation where business transactions are not recorded and evaluated according to the accounting principles.
This method of single entry and incomplete records has got consequences;
It promotes fraud because there is lack of control of the business’ transactions. Data is not enough to prove that someone is cheating or stealing from the organization.
It is hard to evaluate the performance and financial position of the business because the debit entries do not correspond with the credit entries. The profits or losses are not well assessed.
In case the organization needs to sell out shares of the business, it becomes very difficult to set the value of the shares. The value of the business is hardly evaluated.
Wrong and inadequate decisions are taken because the information is not sufficient in order to take the best decisions for a better development of the organization.
It is hard for tax assessors to evaluate the value of payable taxes by a business that has incomplete records.
Financial aid is usually refused to such businesses with incomplete financial records, because there is no way the financial institution may be ensured of getting the funds back other than by analyzing the financial statements of an organization.
However, for businesses using single entry records, it does not require a lot of knowledge from the accountant; hence it reduces on the cost of labor for the business.
And also the single entry and incomplete records can be regarded as a solution in case of loss of records through accidents such as flood, fire or even deliberate intention as a result of fraud.
Some businesses are still using this practice for their bookkeeping because of;
Ø Some business owners do not appreciate the value of their businesses, this means in some...

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"Discuss the Merits and Demerits of Single Entry Bookkeeping and Incomplete Records and Give Reasons That Justify Its Existence Regardless of Its Short Coming:". Anti Essays. 14 Dec. 2018

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Discuss the Merits and Demerits of Single Entry Bookkeeping and Incomplete Records and Give Reasons That Justify Its Existence Regardless of Its Short Coming:. Anti Essays. Retrieved December 14, 2018, from the World Wide Web: http://parimatch-stavka7.com/free-essays/Discuss-The-Merits-And-Demerits-Of-311376.html


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