SINGLE

ENTRY
ACCOUNTING
 SINGLE ENTRY
 Maintain a single entry basis of
recording/accounting transaction.
No debit and credit effect.
Cashbook
The major record that maintain
showing all receipts and
disbursements
ACCOUNTING PROBLEMS

 Determination of Net Income or

Net Loss.

 Preparation of Income
Statement
 Preparation of Statement of
Financial Position.
 DETERMINING NET INCOME
OR LOSS
 Net assets approach or capital
maintenance approach is used.
 Recognizing Expense when it is
incurred regardless of when paid.
 Any increase of the capital of
retained earnings is net income
and any decrease is net loss.
To compute for the Net income or net loss.

Formula for proprietorship or partnership:

Capital, end XX
Add: Withdrawals XX
Total XX
Less: Capital, beginning XX
Additional investments XX XX
Net Income XX
 SAMPLE
PROBLEM
 Jose Masungit Company has the
following information in the cash
book.

Capital, 12/31/2019 1,200,000

Capital, 1/1/2019 800,000
Withdrawals 900,000
Additional Investments 600,000

Note: Capital is the excess of total assets over

total liabilities.
 SOLUTION:

Capital, end 1,200,000

Add: Withdrawals 900,000
Total 2,100,000
Less: Capital, beg. (800,000)
Addt’l investments (600,000)
Net Income 700,000
Formula to compute for the Net Income
or Net Loss for a Corporation.
Retained earnings, end XX
Add: Dividends XX
Other items that decrease
retained earnings but
not profit or loss XX XX
Less: Retained earnings, beg. XX
Other items that increase
retained earnings but not
profit or loss XX (XX)
Net Income/Net Loss XX
 SAMPLE
PROBLEM
 Johnamaka Palmukha Corporation has the
following information for the year 2019:
Retained earnings, 12/31/19 4,000,000
Retained earnings, 1/1/19 4,500,000
Dividends (15%)
Fair Value 2,500,000
Book Value 2,000,000
Decrease in RE
due to change in policy 3,000,000
Increase in RE due to correction
of Prior Period Errors 900,000
 SOLUTION
Retained Earnings, end 4,000,000
Add: Dividends 2,500,000
Other items that decrease
retained earnings due
to change in policy 3,000,000
Total 9,500,000
Less: Retained earnings, beg. (4,500,000)
Other items that increase
retained earnings due to
correction of prior period errors (900,000)
Net Income 4,100,000
Dividends is recognized at fair value as it is less than 20%
 If the RE & SHE beg. and
the end cannot be
determined.
 Then, we use the change in assets
and liabilities.
 Increase in assets and decrease in
liabilities = increase in net assets.
 decrease in assets and increase in
liabilities = decrease in net assets.
 SAMPLE
PROBLEM
 Carn Apper Corporation is selling luxury cars
but they use only cash book in recording their
transactions the following are given in the books
of the company for the year 2019:
Increase in cash 1,500,000
Increase in A/R 500,000
Increase in Inventory 2,000,000
Decrease in prepaid expenses 100,000
Increase in Land 5,000,000
Decrease in A/P 1,100,000
Increase in Bonds Payable 3,000,000
Dividends 1,500,000
Increase in Share Capital 4,000,000
Increase in Share Premium 1,000,000
SOLUTION:
Increase in cash 1,500,000
Increase in A/R 500,000
Increase in Inventory 2,000,000
Decrease in prepaid expenses (100,000)
Increase in Land 5,000,000
Decrease in A/P 1,100,000
Increase in Bonds Payable (3,000,000)
Total 6,000,000
Add: Dividends 1,500,000
Total 7,500,000
Less: Increase in Share Capital (4,000,000)
Increase in Share Premium (1,000,000)
Net Income 2,500,000

Increase in share capital and share premium are

deducted because they increased net assets not
representing profit or loss.
PREPARATION
OF
FINANCIAL
STATEMENTS
 PREPARATION OF INCOME
STATEMENT
Computation of Revenues and
Expenses.
 Cash Receipts and
Disbursements.

Change in assets and liabilities.

 Conversion from Cash
Basis to Accrual Basis is
essential in this situation.
The computation involves:
Sales
Purchases
Income other than sales
Expenses in general
Depreciation
 Computation for the Depreciation

Carrying amount of PPE, beg XX

Add: Cost of property acquired XX
Less: Carrying amount of PPE, ending XX
Carrying amount of property sold XX XX
Depreciation XX
PREPARATION OF STATEMENT OF
FINANCIAL POSITION
Involves inventorying, counting and
verification:
Cash = counting
Cash in bank = examination of bank
statement
Account receivables and notes
receivables = summarized unpaid
sales invoice and promissory notes
PREPARATION OF STATEMENT OF
FINANCIAL POSITION
Merchandise, supplies and
other inventories = counting,
the is determine in the
purchase invoices.
Cost of PPE = reference dead
of sale and other documents
evidence ownership.
PREPARATION OF STATEMENT OF
FINANCIAL POSITION
A/R and A/P = invoice,
memoranda, correspondence,
and even consultation with
creditors.
Capital or Equity = residual
amount of assets and
liabilities.
QUESTIONS
.
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