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Double entry system

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It is the system in which both the aspects i.e. debit as well as credit are recorded in the books of accounts .It records transactions relating to all the accounts i.e. personal, real and nominal.

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Double entry system

  1. 1. Double Entry System
  2. 2. Types of Accounting System Single Entry System Double Entry System
  3. 3. Single Entry System • It is the system in which only one aspect of each transaction is recorded. In this system only transaction relating to personal accounts are recorded whereas transactions relating to real & nominal accounts are ignored. Hence in this system it is not possible to prepare P& L A/C and Balance Sheet to ascertain results and financial position of Business
  4. 4. Double Entry System • It is the system in which both the aspects i.e. debit as well as credit are recorded in the books of accounts .It records transactions relating to all the accounts i.e. personal, real and nominal.
  5. 5. Advantages Complete record of Transactions. Check on Accuracy Determination of Financial position Scientific System Ascertainment of Profit & loss Ascertainment of cash Balance Prevention of Fraud Better control & decision making Comparison of results
  6. 6. Disadvantages Requires thorough knowledge Increases the volume of accounting work Only records financial information Records historical costs only i.e does not consider time value of money

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