Single Entry System is a method of maintaining and keeping the accounts similar to checkbook register and single line entry is done in the journal for each transaction. Each transaction is represented as positive or negative entry. For example:
Date
Description
Amount
Jan 1
Beginning Balance
10,000
Jan3
Purchases equipment
(1,500)
Jan 10
Paid bill
(500)
Jan 30
Ending Balance
8,000
Double entry system In double entry system every transaction has two accounts. That is each debit entry has a corresponding credit entry of same amount in another account and vise versa and hence maintains the accounting equation i.e.: Credits = Debits Or Assets = Liabilities + Equity This means that the increase in company's assets will either increase the liabilities or will increase the equity. Or decrease in company assets will either decrease the liabilities or will decrease the equity Advantages of Double Entry System over Single Entry System: 1. Both credit and debit transactions are recorded. 2. Accurate profit and loss is calculated. 3. Financial statements can be made directly from the accounts. 4. Frauds and Errors can easily be detected and rectified.
Basis Double Entry System Single Entry System 1. Both Aspects In this, both aspects of a transaction are recorded In this , both aspects of transaction are not recorded. In fact, for some transactions two aspects, for some others one aspect and yet for others no aspect at all are recoded. 2. Accounts Under this system, personal, real and nominal etc., all the accounts are maintained. Thus, it is a complete and specified system of accounting. Under this system, only personal accounts and cash book are maintained. Hence, it remains an incomplete record of accounts. 3. Trial Balance Under this system, Trail Balance is prepared and thus, the arithmetical accuracy of the books of account is verified. Under this system, Trial Balance cannot be prepared due to incomplete system of accounting. Therefore, arithmetical accuracy of the accounting cannot be verified. 4. Profit or Loss Under this system, after a certain period, net profit or net loss can be ascertained by preparing Profit and Loss Account. Under this system, Profit and Loss Account is not prepared to ascertain the net profit or loss. Method for ascertaining profit or loss is not adequate. 5. Financial Position Under this system correct financial position of the business can be ascertained by preparing Balance Sheet. Under this system, Balance Sheet is not prepared. Only statement of affairs is prepared. The 6. Adjustments Under this system, adjustments are made at the time of preparing final accounts. There is no provision to make adjustments primarily because of incompleteness of accounts. 7. Use This system is used by almost all the businesses This system is used by only tiny businesses and institutions. 8. Authenticity This system is considered authentic by the Court. The Court does not consider this system as authentic.
Single entry system is not actually any system. It is just a try to maintain record of transaction that are take place in business by an individual who do not have knowledge of accounting. It is just an incomplete record which a small trader is making who can't afford a account writer for the same.
Single Entry System is easy from Double Entry System in case of Lost the Accounts by any reason. There is similarity between Single Entry & Double Entry System is that transactions are effected to Both Systems.
Single entry system is the system which includes only one account n double entry system is the system system includes both the account debit side is debited and Credit side is credited.
It is a system in which some time no effect of transaction is recorded,some time only one effect of transaction is recorded and some time both effects of each transaction are recorded is called single entry system. AND A system in which both effcts of every transaction are recorded is called double entry system.
Single entry system in which sometime both aspect of transcation are recorded, sometime one aspect of transcation is recorded, sometime no aspect of transcation is recorded it is know as single entry system
What are differences between single and double entry system is not important. What is important is "what is not the difference between single and double entry system'. So I hope everyone has got their valuable answers now get your assessments ready and submit it to your teachers.
