The following are the differences between single entry and double entry system:
1. Meaning
Single entry system is an incomplete system of recording financial transactions. Double entry system is a complete system of recording and reporting financial transactions.
2. Duality
Single entry system is not based on the concept of duality. Double entry system is based on the concept of duality.
3. Accounts
Single entry system maintains only personal accounts of debtors and creditors and cash book. Double entry system all personal, real and nominal accounts.
4. Trial Balance
Single entry system can not prepare a trial balance and hence, arithmetical accuracy of books of accounts can not be checked. Double entry system prepares trial balance and hence, arithmetical accuracy of the books of accounts can be checked.
5. Profit Or Loss
Single entry system can not ascertain the true amount of profit or loss of the business as it does not maintain nominal accounts. Double entry system ascertains true profit or loss of the business as it maintains all nominal accounts.
6. Financial Position
Single entry system can not ascertain the true financial position of the business because it does not maintain real accounts except cash book. Double entry system ascertains financial position of the business as it maintains all personal and real accounts.
7. Suitability
Single entry system is suitable to a small business where only limited number of transactions are performed. Double entry system is suitable for a large business.
8. Tax Purpose
Single entry system is not acceptable for the purpose of assessment of tax. Double entry system is acceptable for the purpose of assessment of tax
