Single Entry System: It is an incomplete form of recording financial transactions. It is the system, which does not record two aspects or accounts of all the financial transactions. A single entry system records only one aspect of the transaction. Thus, a single entry system is not a proper system for recording financial transactions.
Double-Entry system: A double-entry system is a system of book-keeping, which is recording two aspects of the business. That means it records all credit and debit aspects of business transactions.
Difference Between Double Entry and Single Entry
The following are the differences between single entry and double entry systems:
|Single Entry||Double Entry|
|1. It is an incomplete system of Book-Keeping. It is a Crude form of book-keeping.||1. It is a perfect and complete system of book-keeping.|
|2. In most cases only one aspect of the transaction is recorded.||2. Two-fold aspect of the transaction is recorded.|
|3. Only Personal accounts are maintained besides the cash book.||3. Personal, Real and nominal accounts are maintained in the ledger.|
|4. Since only one aspect of the transaction is recorded the trial balance can not be prepared.||4. Since, twofold aspects of the transaction are recorded a trial balance can be easily prepared.|
|5. Since, Trial balance cannot be prepared arithmetical accuracy of books cannot be tested.||5. By preparing trial balance arithmetical accuracy. of the books can be tested.|
|6. By preparing the statement of affairs financial position is found out approximately.||6. Profit can be ascertained by preparing a profit and loss account.to ascertain the true and fair financial position, a balance sheet can be prepared.|
|7. Errors cannot be detected and rectified easily.||7. Errors can be easily detected and rectified.|
|8. Sole trader, partnership firms generally maintain their books under this method.||8. There are certain hard and fast rules. One has to follow scrupulously in preparing accounts.|