distinguish between double and a single accounting system with minimum 10 points
Answers
Answer: In a single entry system, only single entry is recorded which can be either debit or credit transaction. On the other hand, double entry system has a double recording method in each transaction. This means that for every debit record there is a corresponding credit entry and vice versa.
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Answer:
Single accounting :-
1. Only one Balance Sheet is prepared which contains assets and liabilities.
2. The purpose of preparing accounts is to show the financial position of a firm at a particular date.
3. Depreciation is deducted from the respective assets in the Balance Sheet.
4. The revenue account is known as Profit and Loss Account and Profit and Loss Appropriation Account, respectively.
Double accounting
1. The Balance Sheet is split up into two parts:
(i) Capital Account and(ii) the General Balance Sheet.
2. The purpose of preparing accounts is to show the amount of capital received and the application of the same in fixed assets.
3. However, the fixed assets are always shown at book value, i.e., they are not written-down in the books. As a result, depreciation fund account is created (after charging the same in Revenue Account) which is invested in outside securities (known as Depreciation Fund Investments Account). Both these items, —depreciation and depreciation fund investments—appear in the General Balance Sheet.
4. The revenue account is known as Revenue Account and Net Revenue Account, respectively.