Following are the limitations of single entry system
1. It is not based on the double-entry system, arithmetical accuracy of books of accounts can not proved.
2. No clear idea about the financial position.
3. Comparison with previous years performance is not possible due to incomplete information.
4. It encourage fraud, misappropriation etc. among employess.
5. In the absense of nominal accounts, it is difficult to determine the exact profit or loss.
6. It is difficult to obtain loans from bank or other financial institution.
