Single Entry Bookkeeping VS Double Entry Bookkeeping

Single Entry System / Bookkeeping VS Double Entry System / Bookkeeping is an important topic in the field of accounting. Double Entry Bookkeeping follows Double Entry System while Single Entry Bookkeeping emphasizes on Single Entry System.  Accountants and Bookkeepers are the persons in the company and those can record and manage Books of Accounts. Without knowing two systems, recording of Business Transactions can not be done accurately. Single Entry System is the one in which only one aspect of transactions are recorded. Credit side is recorded but debit side is not and vice versa. Sometimes whole transactions are not recorded. So it is incomplete system of accounting or also known as accounts from incomplete records. Whereas in Double Entry System, both aspects of transactions are recorded. For every debit there must be a credit side. The total of debit and credit must be equal in any transactions. So double entry system is complete and better than single entry system.

If you don't know then here is article about Bookkeeping. Also, there are Bookkeeper Course Online which you can take and can provide Bookkeeping Payroll Services.

Here we study the differences between these two systems of Accounting.

You May Also Be Looking For, "Advantages And Disadvantages of Single Entry System And Double Entry System"

Single Entry Bookkeeping   VS   Double Entry Bookkeeping

1.  Under Single Entry system only one aspect of transactions is recorded or the complete transactions are not recorded while in Double Entry System, both aspects of transactions are recorded.

2.   In the former system, only Cash account and personal accounts like Accounts Receivable, Accounts Payable, etc. But in the later system, all five Types of Accounts are recorded in the books of accounts.

3.  
Complete accounting processes are not impossible in the single entry system, so we can not show true profits of the business. Whereas in double entry system, complete accounting processes are possible and hence accurate results of individual company businesses are possible.

4.   Financial Statements are not reliable under this system as business trading account and profit and loss account (business P&L) can not be prepared accurately. This System also lacks Balance Sheet and only prepare Statement of Affairs that is not comprehensive as compare to Balance Sheet and hence it can not present true and fair view of financial position of company businesses. While under the Double Entry System, Income Statement and Balance Sheet show true and fair view of Financial Statements.

5.   Errors and Frauds can not be detected easily as the accounting equation, financial statements are not prepared accurately. But in under double Bookkeeping System, Bookkeeper and Accountant maintain complete records of company businesses with the help of latest accounting software, so detection and prevention of errors and frauds are possible easily.

6.   Single Entry System is economical and easy to understandable because it is utilized in small level businesses while double entry bookkeeping cost is much higher and this system is complex because it is installed in small and medium businesses and biggest accounting firms.

So, it is all about Single Entry Bookkeeping VS Double Entry Bookkeeping and we can say double entry system is better than Single Entry System.