Co-operative Banks Require Double Entry Accounting System

Abstract

The accounting system that is necessary to bring out the business results should have enough space to accommodate the changes taking place from time- to- time in the concerned field. Cooperative societies were following an accounting system which was very simple to understand even by those who are not much educated. Today, the condition has changed throughout the world as a result of which cooperatives in different sectors started using double entry accounting system. The study conducted in 24 service cooperative banks (SCBs) in Thiruvananthapuram district in Kerala reveals that no SCB follows the double entry accounting system in its complete form. Wide variation is found in the preparation of R&D statement onwards. The Trading Account, P&L Account and the Balance Sheet prepared by the selected SCBs are in no way comparable with one another, thus, lacks uniformity. It is found that there is no uniformity in the heads of accounts, treatment of items in the final accounts, pattern of preparation of final accounts and also in the preparation of schedules or even budgets. The study was conducted with the main objective of knowing whether the SCBs follow uniform pattern in the preparation of final accounts. The study suggests that double entry accounting system has to be implemented in SCBs.