What do you mean of Bookkeeping? What is basically difference between Single-Entry vs. Double-Entry bookkeeping?
Here, I am very glad to give you this answer.
Bookkeeping is part of the accounting process basically for small business which keep records of financial transactions. These transactions include purchases, sales, receipts from customers, billing for goods sold or services provided to clients and payments by an individual person or an organization/corporation. It also involves the recording, storing and retrieving of financial transactions for a company, nonprofit organization, individual, etc.
Differences between Single-entry and double entry bookkeeping:
- Now, let’s take a look on the basic difference between Single-Entry vs. Double-Entry in bookkeeping which are most commonly used within small business.
Single entry bookkeeping:
- Our transaction using personal checkbook comes under the single-entry method as it keep records of debits and credits with increase and decrease in balance.
- It tells us the amount of money we have in the bank, but we don’t know where our money will go in the future.
- Single entry bookkeeping based on duality.
- The cost of single entry system is cheap.
- The preparation of trial balance is not useful.
- Profit or loss account are not useful for Single entry bookkeeping.
Double entry bookkeeping:
- On the other hand, double-entry method keep record of our expenses and accounts in the appropriate categories.
- It is the most common strategy used by accounting software, large corporations and CPAs. It gives detail of how much we are spending on a particular expense category and tracks our future spending.
- Double entry bookkeeping is not based on duality.
- The cost of Double entry system is costly.
- Preparation of trial is useful for it.
- In double entry bookkeeping profit and loss account are useful.
Get further detail and information from QuickBooks Payroll Customer support number 1-855-441-4417.