Disadvantages and Advantages of Double Entry System

Double entry bookkeeping refers to the maintaining of economic dealings as a ‘double entry.’ Every deal a firm connects in has two the same and conflicting belongings in at least two accounts of a firm’s economical declaration. It is the starting point for the Accounting idea: Assets = Liabilities + Shareholder’s Equity. It employs debits and credits in recording dealings. Advantages of this technique include: 1. it permit for an obvious and simple check on whether or not dealings were recorded correctly since total debits must equal total credits. 2. It is more efficient for tracing errors. Disadvantages include: 1. it is more complex to recognize, and firms without someone who has the know-how to perform it may have to outsource the job making it more costly for them 2. It has need of more time to perform