Incomplete records: any method of recording financial transactions that is not based on the double-
entry model
Single-entry bookkeeping: a method of bookkeeping where only one aspect of each financial transaction
is recorded.
Why? - Using single entry bookkeeping
- Keeping few records only
- Sending paperwork to accountant and year-end (not preparing accounts during year)
Step 1: Calculate capital
Start of year Year-end Statement of affairs: a list of the
$ $ $ $ business assets and liabilities at a
Assets certain point in time, prepared to
calculate the capital of a business.
--- *** ***
▫ Profit ≠ opening capital –
--- *** ***
closing capital
** ** ▫ Capital can be in form of non-
liabilities current assets.
--- *** *** ▫ Include acccrued & prepaid
--- *** (**) *** (**) expenses
Capital *** ***
Step 2: calculate profit
✓ Account method (Loss/profit are balancing figures)
Debit Credit
Drawings Bal b/d (closing capital)
Loss for the year Capital introduced
Bal c/d (closing capital) Profit for the year
✓ Listing method
Profit = closing capital + drawings – opening capital – capital introduced
Loss = opening capital + closing capital + capital introduced – drawings
Closing capital = opening capital + capital introduced + net profit (or -net loss) - drawings
Step 3: missing figures
use control accounts (using credit sales & purchases) when one figure missing otherwise examine other
parts of system to find figures
Cash + credit sales & purchases are both used for final statements
Step 4: summary bank account
Owner may keep records like Why summary cashbook?
entry model
Single-entry bookkeeping: a method of bookkeeping where only one aspect of each financial transaction
is recorded.
Why? - Using single entry bookkeeping
- Keeping few records only
- Sending paperwork to accountant and year-end (not preparing accounts during year)
Step 1: Calculate capital
Start of year Year-end Statement of affairs: a list of the
$ $ $ $ business assets and liabilities at a
Assets certain point in time, prepared to
calculate the capital of a business.
--- *** ***
▫ Profit ≠ opening capital –
--- *** ***
closing capital
** ** ▫ Capital can be in form of non-
liabilities current assets.
--- *** *** ▫ Include acccrued & prepaid
--- *** (**) *** (**) expenses
Capital *** ***
Step 2: calculate profit
✓ Account method (Loss/profit are balancing figures)
Debit Credit
Drawings Bal b/d (closing capital)
Loss for the year Capital introduced
Bal c/d (closing capital) Profit for the year
✓ Listing method
Profit = closing capital + drawings – opening capital – capital introduced
Loss = opening capital + closing capital + capital introduced – drawings
Closing capital = opening capital + capital introduced + net profit (or -net loss) - drawings
Step 3: missing figures
use control accounts (using credit sales & purchases) when one figure missing otherwise examine other
parts of system to find figures
Cash + credit sales & purchases are both used for final statements
Step 4: summary bank account
Owner may keep records like Why summary cashbook?
