What are the advantages and disadvantages of single entry bookkeeping?

Single entry bookkeeping is a simple accounting system that allows only a single entry of each of the accounting transactions into the record.  It is used in small businesses or simple applications and it does not call for the keeping of ledgers or journals.

Advantages:

• Single entry bookkeeping is not only easy to understand but also easy to implement, track and maintain. There are no fixed principles to be followed when performing financial transactions.


• Single entry bookkeeping is an economical accounting system as the recording of financial transactions does not call for the hiring of highly skilled accounting professionals.


• Profits can be easily determined in single entry bookkeeping by a comparison between the closing and the opening balance of the given period.

Disadvantages:

• Single entry bookkeeping is prone to error and fraud, as it does not aid in the checking of arithmetical accuracy of financial information.


• The lack of a guiding set of principles for performing financial transactions make single entry bookkeeping unsystematic and therefore unscientific as it is not standardized.


• The recording of only one aspect of the financial transactions makes single entry bookkeeping an incomplete system.