Page 30 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

level of details and accuracy as double- Relevance of accounting concepts and
entry does. It is more straightforward principles in Book-keeping
and less comprehensive. Also, it lacks The relevance of accounting concepts

self-checking mechanism in contrast and principles in Book-keeping is to
with double entry. improve the communication of financial
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information in language that is acceptable
(b) Every transaction is recorded only once, and understandable among enterprises.
typically in a simple ledger or journal.
The principles promote uniformity in
(c) The main focus is primarily on the preparation of financial statements,
tracking cashflows, such as receipts making it possible for persons to compare
and payments. the financial performance and position of

(d) The single entry is normally recorded as different enterprises. The concepts are there
either a receipt or payment representing to make financial statements and reports
an increase or decrease in the cash relevant, reliable, and understandable to
balance. It would not use two sides to users of financial information.
record transactions.

(e) Single-entry system does not maintain Relationship between accounting
a formal ledger with separate accounts. principles and concepts

Instead, it relies on a running total of None of the accounting concepts presented
cash inwards and outwards. is expected to be applied in isolation.
In many cases, the application of some
(f) Financial statements, such as income accounting concepts will reinforce others.

statements and financial positions, are A few examples are given to explain such
not readily available with single-entry relationships.
system.
Going concern principle and the
Activity 2.2 historical cost concept
The assumption of a going concern has
Read more about accounting principles an effect on the values of assets and
and concepts from various reliable liabilities that are reported in the financial
sources, then write short notes, and statements. When thinking about the
finally keep your notes in a portfolio figure to be reported for different assets
for future reference. in the financial statements, a business has

to avoid looking at the value such that
each asset can be sold in the market at
present time.

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Student’s Book Form One

Book Keeping Form 1 New 2024 FINAL.indd 22 18/10/2024 10:14