Distinguish single and double entry system?

Answer 1

Single entry records only one aspect of transaction, such as:

- - Cash received from sale is recorded in cash register only

- - Goods sold on credit are recorded in the individual's account only

- - When cash is received from the customer, to whom the something was sold on credit, the receipt may be just recorded in the account of individual only

Double entry records both aspects of transaction, such as:

- - When good are sold on cash the two aspects of the transaction are - the seller has sold goods and received cash against them. The goods sold are benefit transferred to the purchaser (Credit) whereas the cash received if the benefit against the goods sold (Debit).

- - When the goods are sold on credit the benefit given is the same i.e. goods sold but the benefit received is not cash but a right to receive cash from the customer. Therefore, in this case Debit is given to customer's account (account receivable) instead of cash.

- When cash is received from the customer the right to receive cash ceases. So, the benefit received is cash and benefit transferred is the right to receive cash. Here cash will be debited and customer will be credited.