Advantages of Double Entry

Advantages of Double Entry

Advantages of double entry system can be explained in terms of standard rules, mistake identification, accurate reporting.

1.    Standard Rules

First advantage of double entry system is its standard rule of processing. In double entry system information is processed through standard rules. These rules are commonly known as debit & credit rules.

2.    Mistake Identification

Second advantage of double entry system is it’s in built facility of identifying some mistakes i.e. mistakes with single effect. For example only one aspect is recorded, or one side (debit or credit) is wrongly recorded.

3.    Financial Result

Third advantage of double entry system is its accurate reporting of financial results. Double entry is deemed to produce accurate financial result, if appropriately applied.

4.    Large Scale Organization.

Fourth advantage of double entry system is management of large scale organization. In small organization system, record can produce accurate results. However, in case of large scale organization double entry system is a must requirement.