Single Entry System | Double Entry System | Book Keeping | Single Entry System Vs. Double Entry System | Difference between single entry and double entry system | Accounting | Management Notes
Book Keeping is one of the accounting method which involves recording the financial transactions or events of the company in the form of journal entries on a daily basis. With the help of Bookkeeping the enterprises will be able to track their financial transactions which include sales, purchases, receipts, payments etc. This help to analyze the financial position of the company.
Types of Bookkeeping
- Single Entry System
- Double Entry System
In Single Entry System of Book Keeping, only one entry is made at a debit or credit side when the business operations/transactions takes place. In Double Entry System of Book Keeping, both debit and credit entry is made which means that if there is a debit entry , the credit entry is to done which is mandatory when the business operations/transactions takes place.
Cash and Personal Accounts of Debtors and Creditors are maintained in single entry system of book keeping. Personal Real and Nominal Accounts are maintained in double entry system of book keeping.
Single Entry SystemVs. Double Entry System | ||
| Basis | Single Entry System | Double Entry System |
Definition and Meaning | In Single Entry System of Book Keeping, only one entry is made at a debit or credit side when the business operations/transactions takes place. | In Double Entry System of Book Keeping, both debit and credit entry is made which means that if there is a debit entry , the credit entry is to done which is mandatory when the business operations/transactions takes place. |
Nature | The nature of this type of book keeping is simple compared to double entry system. | The nature of this type of book keeping is complex compared to single entry system. |
Tax Purposes | This type of book keeping is not valid for tax purposes or we can say that the tax authorities so not accept it. | This type of book keeping is valid for tax purposes or we can say that the tax authorities so do accept it. |
Trial Balance | Trial Balance cannot be prepared in case of Single Entry system of book keeping. | Trial Balance can be prepared in case of Double Entry system of book keeping. |
Accounts | Cash and Personal Accounts of Debtors and Creditors are maintained in single entry system of book keeping. | Personal, Nominal and Real Accounts are maintained in double entry system of book keeping. |
Financial Position | Using Single Entry System of Book Keeping , we cannot accurately ascertain the financial position of the company. | Using Double Entry System of Book Keeping , we accurately ascertain the financial position of the company. |
Application and Usage | These type of Book Keeping are useful /suitable for small companies. | These type of Book Keeping are useful /suitable for big companies. |