The single entry thus failing to record the two-fold aspects of every business transaction is most incomplete and unreliable in its results and fails to give the necessary information to the trader as to how far his business is profitable or otherwise. The system ignores the two-fold aspects of each and every transaction and as such the records in the ledger are incomplete and partial. Under this system as the two-fold aspects of each and every transaction are not recorded a Trial Balance cannot be prepared to test the arithmetical accuracy of the records. Owing to the absence of Nominal Accounts, Profit and Loss Account cannot be prepared.
In the absence of real and property Account cannot be prepared. In the absence of nominal accounts, profit and loss account cannot be prepared, and the true financial position of the business cannot be ascertained. Any information obtained under the system will not be free from doubt. Should the proprietor want to sell his businesses, it will be a difficult task to fix proper value of various assets, especially of goodwill. In the absence of various checks, which exist in Double Entry System, fraud is more easily committed and is very difficult to detect. In the absence of any reliable information no comparison can be made between one trading periods with that of another.
In the absence of real and property Account cannot be prepared. In the absence of nominal accounts, profit and loss account cannot be prepared, and the true financial position of the business cannot be ascertained. Any information obtained under the system will not be free from doubt. Should the proprietor want to sell his businesses, it will be a difficult task to fix proper value of various assets, especially of goodwill. In the absence of various checks, which exist in Double Entry System, fraud is more easily committed and is very difficult to detect. In the absence of any reliable information no comparison can be made between one trading periods with that of another.