Single Entry vs Double Entry System: Difference and Comparison

Accounting is an important part of commerce students. It starts with the 11th grade. This event continues till they complete their higher studies. Not only that, they even used to implement this method in their workplace as well.

Single-entry and double-entry systems both are parts of accounting and are in use. 

Key Takeaways

  1. Single-entry systems record transactions in a simple, one-sided format, while double-entry systems use a dual-sided approach with debits and credits.
  2. Single-entry systems suit small businesses and individuals, while double-entry systems are widely used in larger businesses and organizations.
  3. Double-entry systems provide a more comprehensive and accurate view of a company’s financial position than single-entry systems.

Single Entry vs Double Entry System

The difference between single-entry and double-entry systems is that single-entry records will be added manually, while on the double-entry system, records will be added using the computerized format. Since it uses a manual entry process, mistakes will happen often, and the process will become tedious. But the double entry system uses a computer so that the process will be easy to complete. 

Single Entry vs Double Entry System

A single-entry system shows the number of times you have spent your money or received it. This is not so famous among big businesses where they use computers for all their activities.

Because this requires manual entry, human beings find it difficult not to make any errors because human mistakes can happen very easier when you start working. 

The double-entry system is a concept used in accounting. It is used to teach commerce students. This method uses two transactions, called credit and debit, whenever a new business and divided equally.

In this system, the transaction form has to move from one account to another. It is one of the most commonly used entry methods. 

Comparison Table

Parameters of ComparisonSingle Entry SystemDouble Entry System
DefinitionUsed for adding data in a single-entry manner.Used to do both accounting and states together.
Also called asSingle-entry bookkeepingDouble-entry bookkeeping
AdvantagesUseful for small businessCan be done using asset formulas
DisadvantagesUses manual entry so mistakes will happen a lotUses computerized entry
ExampleCashbookDebit and Credit methods

What is Single Entry System?

A single-entry system means when you do accounting in the system, all the data will be recorded in a single-entry manner. This is mostly used for businesses where an income statement is used.

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The main information that is recorded in single-entry systems is cash disbursements and cash receipts. Single-entry does not track asset and liability records. They used to be tracked by some other systems. 

They use cash books to keep all their records. This is also called a check register. Some common problems in the single-entry system are difficulty maintaining assets, being very critical to obtain audited financial statements, lots of errors, difficulty tracking liability, and reporting becoming tedious. 

The main reasons for these problems are these records are written manually. They are not computerized, so human errors are always possibly happening.

Only a perfectly trained person can do these works without any errors and easily keep track of handling single-entry and double-entry systems.

This method is sometimes called single-entry bookkeeping. For single-entry bookkeeping, a cash book works as a good example because it is another method of bookkeeping.

It has some features called fixed rules and applications, and the accounting system will be incomplete, arithmetic accuracy is not good, the final account system will not be used, and there will be no profit or loss, it can be ideal for small businesses and startups.

single entry bookkeeping system

What is Double Entry System?

The double entry system is one of the methods of bookkeeping where both accounting and states will take place. It can satisfy the accounting equation.

Most double-entry systems use credit and debit cards for transaction purposes. This method uses computerized techniques so there will be no error, and the end result will be accurate. 

The double-entry system can be classified into 7 different types of accounts such as assets, liabilities, equities, revenue, expenses, gains, and losses. This method was developed during the mercantile period in Europe.

Some people think that the double-entry system has given birth to capitalism. Here every transaction is divided into two parts. One part is called a credit card, and the other part is called a debit card. 

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It can be explained in a simple method. For example, you are starting a business with some initial amount, such as $3000. Then this amount will be divided into two. $3000 for a credit card. And $3000 for debit cards. This type of entry system is mostly used in accounting.

It is taught for students in class 11 commerce. This will be used in higher studies as well. It is an important concept in accounting, as students used to implement this in their real-life problems. 

double entry bookkeeping system

Main Differences Between Single Entry and Double Entry System

  1. A single-entry system is somewhat easier when compared with a double-entry system as it requires more complex accounting methods to perform the transaction.
  2. It is difficult to maintain the records in a single-entry system, whereas double-entry systems records are well maintained with clean reports.
  3. It is good to use a single-entry system for small businesses or startups. On the other hand, big companies prefer a double-entry system.
  4. In order to get well versed with the double-entry systems, you have to first learn single-entry system concepts.
  5. You can easily identify the mistakes and discrepancies in the double-entry system with its impeccable features, whereas the single-entry system does not have that feature.  
References
  1. https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0035087

Last Updated : 14 July, 2023

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24 thoughts on “Single Entry vs Double Entry System: Difference and Comparison”

  1. The single-entry and double-entry systems are explained with great precision, emphasizing their significance in the realm of accounting.

    Reply
    • The article has effectively highlighted the importance of these systems, providing a comprehensive overview to the readers.

      Reply
  2. This article has provided crucial insights into the single-entry and double-entry accounting systems, making it easier to understand their significance in various business operations.

    Reply
    • Absolutely, understanding these systems is fundamental for any commerce student or professional involved in accounting.

      Reply
  3. The article provided a comprehensive explanation of the single-entry and double-entry accounting systems. It shows the relevance of these systems, as well as their advantages and disadvantages.

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  4. The difference between single-entry and double-entry systems is presented in a clear and concise manner. The examples provided bring clarity to the topic.

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  5. The article’s thorough delineation of single-entry and double-entry systems has greatly enhanced my understanding of accounting practices. The examples provided are particularly beneficial.

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  6. The concepts of single-entry and double-entry systems are contrasted effectively, elucidating their specific applications and functions in accounting.

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  7. The detailed comparison between single-entry and double-entry systems offers a thorough understanding of their various components and applications in accounting.

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  10. The article’s detailed explanation of single-entry and double-entry systems offers valuable insights for students and professionals entering the field of accounting.

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