An organization which has records of only personal accounts is said to be operating on the basis of

Answer Details

An organization which has records of only personal accounts is said to be operating on the basis of "Single Entry" accounting. Single entry accounting is a simple system of bookkeeping where each financial transaction is recorded only once, either as a debit or a credit. In this system, only personal accounts (i.e., accounts of individuals, firms, or companies) are maintained, and there is no need to maintain records of real accounts (i.e., accounts of assets, liabilities, and capital) or nominal accounts (i.e., accounts of expenses and revenues). Single entry accounting is suitable for small businesses that have few transactions and do not require complex financial statements. However, it has limitations in terms of accuracy, completeness, and reliability, and may not provide a clear picture of the financial position and performance of the organization. As the organization grows, it may need to switch to double entry accounting, which is a more sophisticated system of bookkeeping that records each transaction in at least two accounts to ensure accuracy and completeness.