Limitations of Single Entry System

Limitations of Single Entry System

Limitations of single entry system may be explained in terms of lack of structure, lack of standard rules, lack of reliablity, lack of accaptablity etc. These limitations have been explained below

1.    Lack of  Structure

Single entry system is not a structure system; rather it is a practice of people to maintain the record in accordance with their convenience & knowledge. Thus this single entry system does not have any proper structure.

2.    Lack of Standard Rules

Single entry system lack standard rules. In fact single entry system is no system, rather a self maintained book keeping. Small businessman keep the record as per their understanding knowledge and convenience. Thus single entry record of every businessman vary from other businessman.

3.    Lack of Reliability

Single entry System cannot produce accurate results. Single entry system is not based on principles and therefore no reliance can be placed on the information produce by the single entry system.

4.    No Acceptability

Single entry system is not an acceptable or recognized system. This is not an standard system, and every organization maintain such system according to his own choice and formats.

5.    Financial Reporting not Possible

Financial results cannot be easily calculated from single entry system. A lot of effort and assumption are required for preparing financial statement, even then, those financial statement are not reliable.