Double-Entry Bookkeeping Versus Single-Entry Bookkeeping

by Greg DePersio

0 min read

Single-entry bookkeeping is where a financial transaction is logged in one account in your small business’s accounting systems. With double-entry bookkeeping, the same transaction is recorded twice, with two offsetting entries in two different accounts within your accounting system.

The single-entry system is easier and can be used by small businesses that do not require balance sheets financial reporting or tax purposes. The double-entry system has the major benefit of being far more accurate; businesses that produce a profit and loss account and maintain a balance sheet must use double-entry bookkeeping.

Essentially, if a business needs to track its assets and liabilities, a single-entry system is not sufficient. In that case, the business must use a double-entry system.

Related Articles

Classifying Assets on Balance Sheet

A balance sheet is a standardized financial statement that typically looks similar…

Read more

Analyzing Cash Flow: How to Use Cash Flow Statement

The cash flow statement is one of the three major financial reports…

Read more

Choose the Right Point-of-Sale System for Your Small Business

Most likely, your business needs a point-of-sale system. POS systems have many…

Read more