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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REVISITING CONTROL PROCESS

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REVISITING CONTROL PROCESS
Let us take the control process as the three-step process of measuring actual performance, comparing it against a standard, and taking managerial action to correct deviations or inadequate standards.
 
A. Measuring.
Measuring is the first step in the control process.
1.  How we measure is done through four common sources of information that managers use. Each of these sources has its own advantages and drawbacks.
a.  Personal observation
b. Statistical reports
c. Oral reports
d. Written reports
2.  What we measure is probably more critical than the how. Both objective and subjective measures are used.

B.  Comparing is the next step in the control process.
1.  It determines the degree of variation between actual performance and the standard.
2.  It’s critical to determine the range of variation, which are the acceptable parameters of variance between actual performance and the standard.

C.  Taking managerial action is the final step in the control process. Although the manager might decide to “do nothing,” two other alternatives are possible.
1.  Correct actual performance.Once the manager has decided to correct actual performance, he or she has another decision to make.
a. Take immediate corrective action, which is correcting an activity at once in order to get performance back on track.
b. Take basic corrective action, which is determining how and why performance has deviated and correcting the source of deviations.
c.  The action taken will depend on the cost/benefit of doing so.
2.  Revise the standard.If the standard was set too high or too low, a manager may decide to revise it.

D.  Summary of Managerial Decisions.
The control process is a continuous flow between measuring, comparing, and managerial action.

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