Write the difference between single entry system and double entry system.

Banking & FinanceManagementCompanies/Organisations

The major differences between single entry system and double entry system are as follows −

Single entry systemDouble entry system
  • Tells about cash, debtors and creditors cash balances only.

  • Records transactions related to business only.

  • Incomplete system of recording the transactions.

  • Can easily record fraud transactions.

  • Hard to find errors.

  • Persons accounts and cash accounts are included.

  • Not accepted by taxation department.

  • Takes lot of time in calculation profit/loss.

  • Suitable for small business.

  • Cost of implementation is not required.

  • Reconciliation of accounts is not possible.

  • Special knowledge is not required in maintaining books.

  • Trail balance can’t be prepared.

  • Not suitable for tax purpose

  • Difficult to prepare financial statement

  • Difficult to tell about financial position

  • Tells about every business financial entity.

  • Records all effects of transactions.

  • Complete system of recording the transactions.

  • Difficult to record fraud transactions.

  • Easy to identify errors.

  • All accounts are considered.

  • Accepted by taxation department.

  • Easy to calculate profit/loss.

  • Suitable to all types of business.

  • Cost of implementation is required.

  • Reconciliation of accounts is possible.

  • Special knowledge is required in maintaining books.

  • Trail balance can be prepared.

  • Suitable for tax purpose.

  • Easy to prepare financial statements.

  • Can easily tell about financial position.

raja
Published on 25-Jul-2020 10:33:04
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