Question

Difference between single account system and double account system

Answer 1

Single Account System

1. There is only one Balance Sheet. It contains the assets and liabilities.

2. Its purpose is to show the financial position of a company at a particular date.

3. Depreciation is deducted from the respective assets in the Balance Sheet.

4. The revenue account is called the Profit and Loss Account and Profit and Loss Appropriation Account.

Double Account System

1. The Balance Sheet is split into two parts in the double account system. There is a Capital Account and the General Balance Sheet.

2. It is prepared to show the amount of capital received and its application in the fixed assets.

3. Fixed assets are always shown at book value. Depreciation and depreciation fund investments are shown in the general Balance Sheet.

4. The revenue account is called the Revenue Account and Net Revenue Account.