Question
What is the difference between Single Entry System and Double Entry System?
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Answer
Difference between Double Entry System and Single Entry System:
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Basis
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Double Entry System
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Single Entry System
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1
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Aspects of a Transaction
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Under this system, both aspects of a transaction are recorded.
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Under this system, both aspects of transaction may not be recorded. In fact, for some transactions both the aspects, for some others one aspect and yet for others no aspect at all are recorded.
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2
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Accounts Maintained
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Under this system, personal, real and nominal, etc., all the accounts are maintained. Thus, it is a complete and scientific system of accounting.
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Under this system, only personal accounts and Cash Book are maintained. Hence, it remains an incomplete record of accounts.
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3
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Trial Balance
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Under this system, Trial Balance is prepared and thus, the arithmetical accuracy of the books of account is verified.
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Under this system, Trial Balance cannot be prepared due to incomplete system of accounting. Therefore, arithmetical accuracy of the accounting cannot be verified.
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4
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Profit or Loss
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Under this system, after a certain period, net profit or net loss can be ascertained by preparing the Profit and Loss Account.
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Under this system, Profit and Loss Account is not prepared to ascertain the net profit or loss. Method for ascertaining the profit or loss is not adequate.
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5
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Financial Position
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Under this system, correct financial position of the business can be ascertained by preparing the Balance Sheet.
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Under this system, Balance Sheet is not prepared. Only Statement of Affairs is prepared. The reason is that the assets and liabilities do not stand at real amounts but at estimated amounts.
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6
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Adjustments
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Under this system, adjustments are made at the time of preparing the Final Accounts.
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There is no provision to make adjustments primarily because of incompleteness of accounts.
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7
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Use
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This system is used by almost all the businesses.
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This system is used by only tiny businesses and institutions.
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8
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Authenticity
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This system is considered authentic by the Court.
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The Court does not consider this system as authentic.
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(vii)
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