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Home Book-keeping Single Entry Vs Double Entry System of Bookkeeping


Single Entry Versus Double Entry System of Bookkeeping:

Learning Objectives:

  1. What is the difference between single entry system and double entry system of bookkeeping?

  2. What are the advantages of double entry system over the single entry system of bookkeeping.

Single entry system  of bookkeeping which does not follow double entry system and as such, does not record or give effect to the two fold aspect of each and every transaction. Under this system of book keeping, generally a cash book and books to record personal accounts are only maintained. It is not really a system because under this system there may be no record of the some of the transactions and only partial record of some others. As such, single entry system of book-keeping is not perfect and frauds and mistakes can hardly be detected. This system is discussed in greater detail on Single Entry System Page. Proper results cannot be obtained by its use.

Advantages of Double Entry Over Single Entry System:

  1. In double entry system of bookkeeping as two fold aspect of each transaction is recorded in the books, a trial balance can be prepared to prove the arithmetical accuracy of the transaction. No trial balance can be prepared under single entry system and hence accuracy of books cannot be proved.
  2. In double entry system the risk of fraud or its non discovery is less. But under single entry system chances of fraud or mistake remaining undetected are very high.
  3. In double entry system a trading and profit and loss account can be prepared very easily. The proprietor can know the profit earned or loss suffered by has business. Under single entry system no trading and profit and loss account can be prepared scientifically and, hence, the proprietor will have no firm idea of profit earned or loss suffered.
  4. In double entry system a balance sheet can be prepared from the books of accounts. The correctness of assets and liabilities can be proved. The balance sheet called statement of affairs in a single entry system is prepared in an unsatisfactory manner. The assets and liabilities are not proved from records. Hence the correctness of assets and liabilities cannot be relied upon.

You may also be interested in other articles from "bookkeeping chapter" chapter:

  1. Definition and Explanation of Bookkeeping
  2. Important Bookkeeping Terms
  3. Double Entry System of Bookkeeping
  4. Single Entry Vs Double Entry System of Bookkeeping
  5. Definition and Explanation of Accounting
  6. Branches of Accounting
  7. Functions of Accounting
  8. Parties Interested in Accounting Information
  9. Systems of Accounting - Cash System of Accounting and Accrual System of Accounting
  10. Bookkeeping Vs. Accounting/Difference Between Bookkeeping and Accounting
  11. Accounting Cycle


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Introduction to Managerial Accounting
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Process Costing System - Addition of Materials & Beginning Inventory
Controlling and Costing Materials
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Standard Costing and Variance Analysis
Gross Profit Analysis
Linear Programming Technique
Segment Reporting and Transfer Pricing
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Service Department Costing
Cash Flow statement
Financial statement Analysis
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Managerial Accounting Terms and Definitions
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Bookkeeping and Bookkeeping Terms
Accounting Principles and Accounting Equation
Accounting For Bills of Exchange
Subdivision of Journal
Final Accounts
Capital and Revenue Items
Single Entry System/Accounting From Incomplete Records
Accounting For Non-Trading Concerns
Accounting for Consignment / Consignment Accounts
Accounting for Joint Ventures
Accounting for Depreciation

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