What Is Single Entry System And Double Entry System?

Single Entry System is a method of maintaining and keeping the accounts similar to checkbook register and single line entry is done in the journal for each transaction. Each transaction is represented as positive or negative entry. For example:

Date	Description	Amount
Jan 1	Beginning Balance	10,000
Jan3	Purchases equipment	(1,500)
Jan 10	Paid bill	(500)
Jan 30	Ending Balance	8,000

Double entry system
In double entry system every transaction has two accounts. That is each debit entry has a corresponding credit entry of same amount in another account and vise versa and hence maintains the accounting equation i.e.:

Credits = Debits
Or
Assets = Liabilities + Equity
This means that the increase in company's assets will either increase the liabilities or will increase the equity. Or decrease in company assets will either decrease the liabilities or will decrease the equity

Advantages of Double Entry System over Single Entry System:
1. Both credit and debit transactions are recorded.
2. Accurate profit and loss is calculated.
3. Financial statements can be made directly from the accounts.
4. Frauds and Errors can easily be detected and rectified.