What are the differences between a single-entry bookkeeping and a double-entry bookkeeping?

A single entry bookkeeping system is simpler to implement compared to a double entry system. This is because a single entry system only uses the most basic information such as account receivable or accounts payable. The double entry system is complex and requires a trained individual to implement. This is because it relies on the concept of duality where change on one account impacts on another.

A single entry system cannot be developed into a...

A single entry bookkeeping system is simpler to implement compared to a double entry system. This is because a single entry system only uses the most basic information such as account receivable or accounts payable. The double entry system is complex and requires a trained individual to implement. This is because it relies on the concept of duality where change on one account impacts on another.

A single entry system cannot be developed into a trial balance to check for calculation errors. A double entry system can be developed into a trial balance to check for calculation errors. However, this does not mean the double entry system is free from errors. The double entry system is susceptible to omission errors and when figures from two affected accounts are omitted the books would still balance, obscuring the underlying error.

A double entry system includes nominal accounts which are essential accounts used to determine profit and losses and the true financial position of the business. A single entry system does not include the nominal accounts and mostly relies on cash accounts which cannot be solely relied on to determine the financial position of the business.