Double and Single Entry System

Double and Single Entry System

Double entry system is based on the rules of debit and credit, where single entry system is not a proper system, rather an attempt by the small enterprise to maintain some record of their business. Difference between double entry and single entry system has been explained below;

1.    Standard Rules

Double entry use standard rules for recording the transactions, where single entry system is not rely a system and therefore does not have any standard rules. Under single entry system records are maintained as per understanding of businessman.

2.    Automatic Mistake Identification

With the help of Double entry system some of mistakes can be easily and automatically identified by the double entry system itself, however, this system does not provide ultimate guarantee of accuracy. In case of single entry system, automatic mistake identification does not exist.

3.    Cost

Double entry system is more costly than single entry system. There are numbers of cost associated with the double entry system like cost of finance manger, cost of stationary or cost of accounting software. Due to these costs, single entry system is preferred by the small businesses.

4.    Acceptability

Double entry system is the only system, which has acceptability and recognition all over the world. Single entry system does not have such recognition and acceptability. Therefore double entry system is followed by the companies all over the world.

5.    Financial Reporting

Accurate financial reports can only be prepared by the double entry system. It is not possible to prepare accurate financial reports with the help of single entry system, and report of single entry system cannot be relied, because single entry system by default does not support the preparation of accurate financial statements.