Q.Which accounting system may be suitable for small sized sole traders and partnership firms ? Explain.

The Single Entry System (incomplete records) suits small sole traders and partnership firms as it is simple and inexpensive.

For small-sized sole traders and partnership firms, the single entry system — that is, accounting from incomplete records — is the most suitable, for these reasons:

• Simple and easy — no need for the full set of double-entry books; only cash book and some personal accounts of debtors/creditors are kept.
• Economical — it saves the cost of maintaining detailed records and trained accountants, which small firms can rarely afford.
• Little expertise needed — the owner can maintain it without deep accounting knowledge.
• Flexible — records can be adjusted to the needs of a small business. …