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Double Entry System
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Single Entry System
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1. |
Both the
aspects of a transaction are recorded in it.
So complete analysis of a transaction is
possible. |
1. |
For some
transactions both the aspects are recorded,
while for some other transactions only one
aspect is considered. Again, some
transactions are not recorded at all. Thus,
complete analysis of a transaction is not
always possible. |
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2. |
All the
difference classes of accounts - assts a/c,
liability a/c, capital a/c, expense a/c and
revenue a/c - are maintained. |
2. |
Only cash
accounts and personal accounts are
maintained. |
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3. |
It is possible
to verify the arithmetical accuracy of books
through
trial balance. |
3. |
As under this
system both the aspects of all transactions
are not recorded, it is not possible to
prepare
trial balance and thereby verify
arithmetical accuracy of books of account. |
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4. |
In this system
profit and loss account can be prepared and
the result of the business can be determined
thereby |
4. |
Under this
system no account is maintained in respect
of income or expenditure. So it is not
possible to prepare profit and loss account.
However, profit and loss is determined
through a statement by comparing closing
capital with the opening capital, but is is
not so reliable. |
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5. |
The financial
position of the business can be compared
through balance sheet. |
5. |
No account is
maintained in respect of assets and
liabilities. So, balance sheet cannot be
prepared. However, a statement of affairs is
prepared on the lines of balance sheet. But
it is not regarded as a reliable document,
since the values of assets and liabilities
are not obtained from the regular books of
accounts. |
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6. |
All the
necessary information is available from this
system at any time. |
6. |
As no detailed
record is maintained in respect of all
transactions full information is not
available from the books of account. |
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7. |
It is easier
to detect mistakes and deflections under
this system. |
7. |
Mistakes and
deflections cannot be detected easily under
this system. |
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8. |
This system is
based on scientific method |
8. |
It does not
follow any scientific rules. |
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9. |
Accounting is
complex and costly under this system |
9. |
Accounting is
less complex and less costly under this
system. |
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10. |
This system
requires men with special knowledge. |
10. |
Men with
common knowledge will do in this case. |
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11. |
In the first
stage each transaction is recorded in a book
named "journal" and therefore it is posted
in another book named "ledger" in the second
stage. |
11. |
There is no
rule here as such. |
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12. |
Since
accounting under this system requires a
large number of employees, it may not be
possible to maintain secrecy. |
12. |
Here secrecy
can be maintained, since only a few persons
are sufficient for performing accounting
job. |
