Double Entry System

Types of Accounting System

Single Entry System

Double Entry System

Single Entry System

• It is the system in which only one aspect ofeach transaction is recorded. In this systemonly transaction relating to personal accountsare recorded whereas transactions relating toreal & nominal accounts are ignored. Hencein this system it is not possible to prepare P& LA/C and Balance Sheet to ascertain results andfinancial position of Business

Double Entry System

• It is the system in which both the aspects i.e.debit as well as credit are recorded in thebooks of accounts .It records transactionsrelating to all the accounts i.e. personal, realand nominal.

Advantages

Complete record of Transactions.

Check on Accuracy

Determination of Financial position

Scientific System

Ascertainment of Profit & loss

Ascertainment of cash Balance

Prevention of Fraud

Better control & decision making

Comparison of results

Disadvantages

Requires thorough knowledge

Increases the volume of

accounting work

Only records financial

information

Records historical costs only i.e

does not consider time value of

money