Accounting Systems

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Accounting systems:- 

  There are two systems in Accounting. They are:

a) Single-Entry System

b) Double-Entry System

(a) Single-Entry System:-        The system which does not totally follows the principal of double-entry system, is called single Entry System. Under this system complete record of each and every transaction is not maintained. Under this method real and Nominal accounts are not maintained. Transactions are recorded only in cash book 📚 and personal accounts are maintained. It is not proper to all it "System" because it is not based on any scientific system like Double Entry System.


(b) Double Entry System:- According to this system, every transaction has two-fold aspect i.e., one party receiving benefit and the other party giving the benefit. When we receive some- thing we give something else in return. For, example, when we purchase goods for cash, we receive goods and give cash in return. When we sell goods on Credit, goods are given and the customer becomes debtor.  This method of writing every transaction in two accounts is known as Double Entry System.


      Every transaction is divided into two aspects and Credit. One Account is to be debited and another Account is to be credited for every transaction in order to have a complete record of the same. Every transaction affects two accounts in opposite sides for an equal value. Both the accounts cannot be debited or Credited. The basis principle of Double-entry system of book-keeping is that for every Debit there is a corresponding Credit of equal value.

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