WAEC Accounting 2024 Theory — Question 6

Model answer

(a) Ose operates a single-entry system of bookkeeping — transactions are not recorded using the double-entry system, so there are no full ledger accounts or a formal balance sheet; records are incomplete. (b) Advantages: 1. It is cheap, since there is no need to employ a trained accountant. 2. It is easy for a layman to understand. 3. It is simple to maintain with minimal technical error. Disadvantages: 1. It cannot be used for formal purposes such as loan or grant applications. 2. It does not clearly show whether the business is making a profit or loss. 3. It does not reveal the true financial position of the business.