Difference between Double entry and Single entry System

Difference between Double entry and Single entry System

1.Rules

Double entry system based on rules of debit and credit and other fundamental principal like business entity, prudence etc. Single entry is not based on any rules rather it is based on most common practices in the market.

2.Acceptability

Double entry system is universally accepted because it is based on international recognized rules where single entry is not universally accepted due to lack of any standardization.

3.Cost

Double entry system involve a lot of cost which includes the cost of books, cost of software in case of computerized double entry system, cost of skilled accountant etc. where the single entry system does not cost you much.

4.Mistake detection

Double entry system ensures the accuracy and internally build control minimize the risk of many mistake and mistake can be identified by double entry system. Single entry system is subject to many mistakes and cannot identify any mistakes.

5.Reporting

Financial statement can be accurately prepared by double entry system. Single entry system financial cannot be prepared with ease if financial statement is prepared by adapting many assumptions. The accuracy would be still at stake.

6.Suitability

Double entry system is suitable for large scale of organization for its accuracy and . single entry system may be suitable for a small scale business like a retail shop , or fruit  corner.