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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Barter Trading and Barter Transactions

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Trading one commodity or service for another commodity or service is called ‘Barter trading’.



Since every person cannot produce every thing that he needs. Therefore, he needs to give / sell what he produces in order to get / buy what he wants?

In early days when ‘money’ was not introduced, people used to exchange goods for goods. This kind of trade, where goods are exchanged for goods, is called barter trade.

In fact, in barter trade, value of one commodity is quoted in terms of other commodity, for example the price of 10 kg of wheat may be equal to 2 meters of cloth or 5 liters of milk. Although, there is no
involvement of money but still every commodity has a value, which means that you have to give a
specific quantity of one commodity to buy a specific quantity of another commodity.

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