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Differentiate between single entry system and double entry system |
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Answer» \tSr. no.BasisDouble Entry SystemSingle Entry System\xa01Aspects of Transactions\xa0\xa0It considers both aspects of a particular transaction.It does not necessarily considers both the aspects of a transaction. It may consider one or may not consider any of the aspects of a transaction. \xa02\xa0Type of Accounts\xa0It maintains all 2 types of accounts namely, real, nominal and personal accounts.\xa0It maintains details and records of personal accounts\xa0only\xa0along with Cash book to record all cash transactions.\xa03\xa0Trial balance\xa0It requires preparation of Trial Balance which identifies arithmetic accuracy of the records maintained.\xa0It is an incomplete system of accounting which and therefore, it does not provide complete details to prepare a Trial Balance.\xa04\xa0Profit and Loss\xa0It facilitates ascertainment of profit or loss with the help of profit and loss account.\xa0It does not maintain complete details of the transactions and therefore, it is difficult to prepare a particular statement which will determine profit or loss.\xa05\xa0Financial Position\xa0It facilitates preparation of balance sheet which shows the financial position of the entity.It is difficult to ascertain the financial position of the entity as balance sheet is not prepared. \xa06\xa0Adjustments\xa0It takes into consideration all the adjustments at the tiime of preparing the financial statements of the entity.\xa0It is an incomplete system of accounting and hence, there is no provision to make adjustments.\xa0\t Differentiate between single entry system and double entry system |
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