Single-entry bookkeeping is a simple system of accounting, in which a single line is used to record each transaction. A bookkeeping journal or statement is typically used to record monetary entries as they occur with credits or debits entered once. Single-entry bookkeeping is often compared to that of a checkbook register or a simple financial statement.
It is common with simple bookkeeping systems that parentheses are used to reflect negative transactions, such as withdrawals or payments. Money coming in, like payments or credits, is not surrounded by parentheses. The parentheses are a straightforward way to differentiate between money being spent, or expenses, and money being deposited, called revenue.
Revenue and expenses can be totaled by week, month, or even year using any single-entry system. Despite being called single-entry, there is more than one method of this accounting system. It is important that all information for each entry is recorded on a single line for it to be considered single-entry bookkeeping.
A common form of the single-entry recording is when one line is used for all of the details for each transaction, including the date, description, amount, etc. Every line is recorded in the same way throughout the bookkeeping statement. This type of single-entry recording does not separate the revenue and expenses by columns or headings. If totals for revenue and expenses are required, they will have to be calculated by tabulating them separately.
Another form of single-entry bookkeeping separates the revenue and expense by creating separate columns on the statement. Each recorded entry would list the date, description and amount as either revenue or expense with a column for each field. It is not uncommon for columns to be added for specific categories. Examples of these columns include taxes, rent and other such items that are routinely recorded on bookkeeping statements.
Regardless of the number of columns on the statement, a single line is still used to record each transaction. The columns provide a way to organize different details of expenses or deposits. In this way, specific categories can be totaled, as well as being able to determine the end balance of the statement.
Bookkeeping is necessary to ensure organized financial management. The single-entry system is a preferred method for many small businesses and personal bookkeeping because of the simplicity of the system. This method of bookkeeping can be learned quickly without extensive training or professional oversight. Single-entry bookkeeping offers a straightforward, simple method for maintaining a basic level of financial documentation.
