The main difference between the Single Entry System and the Double Entry System is that the Single Entry System records a procedure with a single entry and only keeps one side of all transactions, and the Double Entry System is a maintenance system. of absolute, complete and scientific records.
Single entry system versus double entry system
The single entry system is an accounting system in which, according to the rules, only cash records and personal accounts are kept. The double entry system is considered as a scientific method of accounting, it records two aspects, namely giving aspect and relieving aspect of business transactions. The single entry system is an incomplete accounting system while the double entry system is a perfect and complete accounting system. The single entry system only records a single aspect of the transaction. The double entry system records the debit and credit aspects of the transaction. The single-entry system maintains personal accounts of debtors, creditors, and a cash book for recording transactions, and the double-entry system maintains personal accounts, real and nominal for the registration of transactions. The single entry system is mainly used by small businesses and associated firms, on the other hand, the double entry system can be used by large and small businesses to record transactions. No specific knowledge is required to keep books in the single-entry system, while the person responsible for bookkeeping in a double-entry system must possess specialized knowledge and skills. The single entry accounting system is less expensive and is considered the easiest way to record transactions, and the double entry accounting method is expensive and the recording of transactions involves complex work. No specific knowledge is needed to keep books in the single entry system, while the person responsible for accounting in a double entry system must possess specialized knowledge and skills. The single entry accounting system is less expensive and is considered the easiest way to record transactions, and the double entry accounting method is expensive and the recording of transactions involves complex work. No specific knowledge is required to keep books in the single-entry system, while the person responsible for bookkeeping in a double-entry system must possess specialized knowledge and skills. The single entry accounting system is less expensive and is considered the easiest way to record transactions,
|single entry system||Dual Entry System|
|The accounting system in which only one-sided entry is required to record financial transactions is a single-entry system.||The accounting system, in which each transaction affects two accounts together, is known as the Double Entry System.|
|hard to identify||easy to locate|
|Small companies||Big enterprises|
|Personal and cash account||Personal, real and nominal account|
|Preparation of financial statements|
|It cannot be easily determined.||It can be easily determined.|
What is the single entry system?
A single entry system logs or records a transaction with a single entry and only maintains one side of each transaction. It is the old way of recording or recording financial transactions and is less well known than the double entry system and is mainly used for records in the income statement. This term is used to explain the problems associated with incomplete transaction accounts and is popularly referred to as ‘Account Preparation from Incomplete Records’. The single entry system is used primarily in the manual accounting process and by small businesses that do not have the financial capacity and resources for a full accounting system.
Single Entry System Types
- Pure Single Entry: In this, details of sales, purchases and cash and bank balances are not available, only personal accounts are considered.
- Simple Single Entry – This account is maintained based on the double entry system, but only two accounts are considered. Entries are made only from these accounts and no other accounts are considered.
- Quasi Single Entry: In this accounting, in addition to personal and cash accounts, other subsidiary accounts are also maintained. The most important are the sales, purchasing accounts and invoice books. Discounts are also recorded in the personal account.
Most businesses, most being small businesses, use double-entry bookkeeping for their accounting needs. Two features of double-entry bookkeeping are that each account has two columns and each transaction is placed in two accounts. Two entries are made for each transaction: a debit to one account and a credit to another. An example of a double entry transaction would be if the company wants to liquidate a creditor. The cash account is reduced by the amount the business owes the creditor. It would be the debit. The double entry then reduces the amount the company now owes to the creditor’s account, since it has obtained or received the amount of the credit the company is extending. That is the credit or loan. If you want to keep track of asset and liability accounts,
- The accounting structure in which only one aspect of a transaction is recorded, ie debit or credit, is known as a single entry system. The double entry system is a record keeping system whereby both aspects of a transaction are captured.
- In a single entry system, incomplete records are kept while in the double entry system all transactions are recorded.
- The single entry procedure is simple and easy, while the double entry system is complex and requires accounting expertise for record keeping.
- In a single entry system, the comparison between the two accounting periods is very difficult. In contrast, we can easily match two accounting periods in the double-entry system.
- The single entry system maintains personal and cash accounts. On the other hand, personal, real and nominal accounts are kept in a double-entry system.
- The single entry system is more appropriate for small businesses, but large organizations prefer the double entry system.
Beyond all, it is clear that the single entry system is incomplete and the double entry system is complete and scientific. In addition, the single entry system does not offer any security against fraudulent accounting practices, while the possibility of fraud exists in all companies and it is true that the double entry system can help to exclude fraudulent practices in the maintenance of accounts.