Single entry System Vs Double entry System.pptx

A single-entry system is a simplified accounting method that only records one side of a financial transaction, typically focusing on cash receipts and payments, along with personal accounts. Double-entry accounting is a system of bookkeeping where every financial transaction is recorded in at least two accounts, with one account being debited and another credited.

1. Single Entry System Vs Double entry System Dr.Lavanya M.R Assistant Professor Sri Ramakrishna College of Arts and Science

2. Difference Single Entry System Double Entry System 1. Transaction Recording Records only one aspect of a transaction (e.g., cash in or cash out). Records both debit and credit aspects of every transaction. 2. Opening of accounts Only personal accounts and cash account are opened All Personal, real and nominal accounts are opened

3. Difference Single Entry System Double Entry System 3. Complexity Simple and easy to use; requires minimal accounting knowledge. More complex; requires expertise in accounting. 4. Completeness Provides incomplete records; primarily tracks cash and personal accounts. Provides complete records of all types of accounts (personal, real, and nominal).

4. Difference Single Entry System Double Entry System 5. Financial Statements Cannot prepare a trial balance or a balance sheet. Prepares a trial balance and a full set of financial statements (like the balance sheet and income statement). 6. Accuracy and Control Less reliable and prone to errors; difficult to detect fraud. More reliable, with better internal controls and easier detection of errors and fraud.

5. Difference Single Entry System Double Entry System 7. Accuracy and Control Less reliable and prone to errors; difficult to detect fraud. More reliable, with better internal controls and easier detection of errors and fraud. 8. Best Suited For Small businesses and individuals. Large businesses and organizations that need comprehensive financial reporting.