Single Entry and Double Entry Accounting

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Single entry accounting/Cash accounting. This system records only cash movement of transactions and that too up to the extent of recording one aspect of the transactions. This means that only receipt or payment of cash is recorded and no separate record is maintained (about the source of receipt and payment) as to from whom the cash was received or to whom it was paid. Double entry book keeping/Commercial accounting. Double entry or commercial accounting system records both aspects of transaction i.e. receipt or payment and source of receipt or payment. It also records credit transactions i.e. recording of Electricity Bill or accruals of Salary payment etc. This concept will be explained in detail in the next lectures but for the time being it should be noted that in cash accounting date of receipt / payment of actual cash is important while in commercial accounting the date on which the expense is caused (whether paid or not) as well as the spreading of the cost of c
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Designing Control Systems

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Designing Control Systems
Since control is the process of monitoring activities to ensure they are being accomplished as planned and of correcting any significant deviations. There are three different approaches to designing organizational
control systems.
A. Market control is an approach that emphasizes the use of external market mechanisms to establish the standards used in the control system.
B. Bureaucratic control is an approach that emphasizes organizational authority and relies on administrative rules, regulations, procedures, policies, standardization of activities, well-defined job descriptions, and other administrative mechanisms to ensure that employees exhibit appropriate behaviors and meet performance standards.
1.  Bureaucratic control has advantages.
a.  Unlike market control, bureaucratic control does not require that all requirements be specified in advance.
b.  Bureaucratic control is useful for keeping recurring, relatively predictable activities running smoothly.
c.  Bureaucratic control focuses on doing the job and aids extrinsic reward systems.

2.  Bureaucratic control has disadvantages.
a.  Innovation is not encouraged.
b.  Needed changes may be inhibited.
c.  Employees tend to comply with regulations rather than committing to a course of action.

C. Market control relies on market mechanisms to regulate prices for certain clearly specified goods and services needed by an organization.
1.  Two conditions must hold if market control is to be used.
a.  There must be a reasonable level of competition in the goods or service area.
b.  It must be possible to specify requirements clearly.
2.  Market controls may be used to regulate internal operations as well as external relations.
a.  Profit centers, e.g., photocopying centers, are set up and charge other departments for their services.
b.  The intra-organizational use of market controls is limited because the conditions of competitiveness and specificity or requirements may not hold. The use of market controls is increasing. For example, outsourcing, using outside vendors to perform services normally carried out within the organization, is becoming a more common practice.

D. Clan control is an approach to designing control  systems in which employee behaviors are regulated by the shared values, norms, traditions, rituals, beliefs, and other aspects of the organization’s culture. Clan control relies on values, beliefs, traditions, corporate culture, share norms and information relationships to regulate employee behaviors and facilitate the reaching of organizational goals.
1.  Clan control differs from bureaucratic control.
a.  Internal motivation is emphasized.
b.  Duties are flexible and tasks are broadly defined.
c.  Influence is based on relevant information and expertise, rather than upon position in the hierarchy.
2.  A primary advantage of clan control is that it is conducive to innovation.

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