Discuss the differences between single entry system and double entry system?

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Single entry system vs. Double entry system

 

Basis of

Comparison         

       Single entry system  

                Double entry system

Definition            It is an oldest accounting system which record only one side of each transactions.              It is scientific and systematic accounting concept that states every transactions has equal and opposite effect in the both side of account.

Nature It is fair and simple in nature.      It is more scientific and complex in nature.

Principle of It is not based on a principle of It follows accounting principle of duality          duality. duality.

Tax propose It is not suitable for tax purpose.      It is easy to determine taxes.

Decision It does not provide relevant It provides relevant information to making information to make a decision. make a decision.

Error      Difficult to identify possible frauds Easy to identify error and frauds.

detection             and accounting error.

Suitability            It is suitable form small firm.       It is suitable for large business firm. Types             of Only personal and real account is Real, nominal, and personal account is account     considered.        maintained.

Preference It is not preferred by stakeholders as It is preferred by stakeholders as it of it provides one side picture of a provides a complete financial picture of stakeholders business firm. a business firm.

 Acceptance        It is not accepted by everyone for It is universally accepted accounting recoding financial transactions.                 concept                for          recording             financial transactions.

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