Livestock Economics, Marketing and Business Management

Distinction between double entry system and single entry system

DISTINCTION BETWEEN DOUBLE ENTRY AND SINGLE ENTRY SYSTEM

• Distinction between double entry system and single entry system is as follows:
• Under double entry system both the aspects, i.e., debit and credit, of all the transactions are recorded. But under single entry system, there is no record of some transactions, some transactions are recorded only in one of their aspects whereas some other transactions are recorded in both of their aspects.
• Under double entry system, various subsidiary books like sales book, purchases book, etc. are maintained.
• Under single entry system, no subsidiary books except cash book which is also considered as a part of ledger is maintained.
• Under double entry system there is a ledger which contains personal, real and nominal accounts. But under single entry system, the ledger contains some personal accounts only.
• Under double entry system preparation of trial balance is possible.
• It is not possible to prepare a trial balance under the single entry system. Hence, accuracy of work is uncertain.
• Under double entry system, Trading and Profit and Loss Account and Balance Sheet are prepared in a scientific manner.
• Under single entry system, it is not possible; only a rough estimate of profit or loss is made and a Statement of Affairs is prepared which resembles a balance sheet in appearance but which does not present an accurate picture of the financial position of the business.