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.

1. Double Entry System

2. Types of Accounting System
Single Entry
System
Double Entry
System

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. 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. 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. 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