Difference between double and single entry system

Before understanding the difference between Double & Single entry System, both concepts should be understood:

SINGLE ENTRY SYSTEM

Single Entry System in accounting is a system in which the proprietors or the firms do not follow specific rules of double entry system to maintain accounts. It is an Incomplete Record of Accounts. The accounts are maintained as per the convenience of the users.

DOUBLE ENTRY SYSTEM

Double entry system is a system under which each transaction is regarded to have two-fold aspects and both the aspects are recorded to obtain the complete record of dealings. It is based on the rule that debit should be equal to the credit.

Luca Friar Pacioli is known as the originator of the Double entry system. He has written the book ‘Summa de arithmetica geometrica proportioni et proportionalita’ on the Double entry book keeping system.

DIFFERENCE BETWEEN DOUBLE ENTRY AND SINGLE ENTRY BOOK SYSTEM OF ACCOUNTING

BASIS OF DIFFERENCE	SINGLE ENTRY SYSTEM	DOUBLE ENTRY SYSTEM
INFORMATION	Single entry system is an incomplete method. In some cases both and in other cases only one or no aspect is recorded.	Double entry system provides complete financial information as both aspects of a transaction are recorded.
COST	The accounts in this system are maintained at lesser cost as the number of accounts maintained is lesser.	It is costly method of recording the transactions. Some businessmen feel it as luxury.
KNOWLEDGE OF ACCOUNTING PRINCIPLES	Any individual can keep the accounts according to his choice and convenience.	Experienced accountants are required to record the transaction in this system.
ACCURACY OF BOOKS	It is not possible to check the accuracy of books in the single entry system.	The accuracy of books can be easily checked to a great extent by preparing a trial balance.
NUMBER OF ACCOUNTS	Only personal accounts and cash book is maintained	All types of personal, real and nominal accounts are prepared.
FINANCIAL POSITION	In the absence of reliable balance sheet, financial position cannot be found out easily.	Exact financial position can be ascertained from the balance sheet.
CHANCES OF FRAUD	The accounts can be easily manipulated in single entry system. It increases the chances of fraud.	Errors of omission and commission can be easily detected in double entry system, it minimizes the chances of fraud.
UTILITY	This system may be used only in small business concerns.	This system is suitable for all types of businesses, whether big or small.
PROOF	In case of disputes, the accounts prepared on single entry system are not considered as reliable and are not treated as evidence in the court of law.	In case of disputes, the accounts prepared on double entry system are treated as evidence in the court of the law.
COMPARISON	In Single Entry System it is not possible to compare the financial results.	In Double Entry System, accounting results may easily be compared and provide useful data for decision making.
SECRECY	In Single Entry System, It is easy to keep the accounts secret as the number of accounts prepare is limited.	Because of the involvement of many persons, it is difficult to maintain secrecy.
PROFIT OR LOSS	The knowledge of true profit or loss is difficult and unreliable too, in single entry system.	True and reliable profit and loss can be ascertained in double entry system.
EVOLUTION	Single Entry System is an old and stagnant system.	Double Entry System is progressive and evolutionary system. It is improving with the passage of time.
TAX ASSESSMENT	The accounts maintained under Single Entry System are not acceptable to taxation authorities.	Sales tax and Income Tax authorities reply upon the accounts prepared on double entry system.
PREPARATION OF TRIAL BALANCE	Trial balance is not prepared.	Trial balance is prepared.
SUBSIDIARY BOOKS	Usually cash book is prepared.	Various subsidiary books are prepared like Cash book, Sales book, Purchases book, Purchase return book, Sales return book etc.
ADJUSTEMNTS	No adjustments are made due to incomplete records.	Adjustments are made at the time of preparing final accounts.

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Accounting	Non profit organisation	Depreciation	Liquidity ratios
Nature of Accounting	Receipts and Payments Account	Depreciation Accounting	Acid Test Ratio
Benefits of Accounting	Scope of accounting	Hire Purchase Accounting	Cash Ratio
Difference between cost accounting and financial accounting	Financial accounting, cost accounting and management accounting	Difference between hire purchase and instalment system	Financial ratio analysis
Difference between transaction and event	Transactions	Users of Accounting	Ratio analysis
Limitation of Accounting	Capital Expenditure	Instalment System	Difference between consignment and sale
Book Keeping	Revenue Expenditure	Reserves Accounting	Abnormal loss vs normal loss in consignment
Accountancy	Difference between capital and revenue expenditure	Provisions	Treatment of loss on consignment
Accounting as science or an art	Accounting Equation	Single entry system	Accounting treatment of consignment
Book Keeping vs accounting	Deferred Revenue Expenditure	Difference between statement of affairs and balance sheet	Joint venture vs consignment
Book keeping vs accountancy	Capital receipt	IFRS	Departmental Accounting
Accounting vs accountancy	Revenue receipt	Balance Sheet	Methods of departmental accounting
Basis of Accounting	Difference between capital and revenue receipt	Profit and loss Account	Allocation of expenses in departmental accounting
Branches of accounting	Difference between accounting concepts and conventions	Trading Account	Inter-departmental transfers
Cash and mercantile system of accounting	Accounting Standards	Voyage Account	Different types of branches
Accounting Principles	Objectives of Accounting	Accounting for Incomplete Voyage	Departmental vs Branch accounting
Golden ru les of accounting	Process of Accounting	Joint venture	Methods of branch accounting
Double entry system of book keeping	Scope of Accounting	Joint Venture Vs Partnership	Incorporation of branch trial balance
Double entry vs Single entry system	Accounting Concepts vs Accounting conventions	Methods of recording transactions in Joint Venture	Garner VS Murray Rule
History of Accounting	Difference between provisions and reserves	Consignment