WhatsApp us

Double Entry System- Characteristics Advantages Disadvantages

Need a hand with your homework? Get expert help now and smash those grades! 💯 Submit your assignment today!

100% human expertise, no AI. 🤖

  • Experienced Tutors
  • On-Time Delivery
  • Plagiarism-Free Work
myhomeworkhelp reviews
Order Homework Help From Experts
Please enable JavaScript in your browser to complete this form.
Please enter the details of your homework requirements.
What should we call you?
Zero spam guarantee.
For order updates only.

Every business organization has two facets associated with it. What is given out has a taker in itself, and every transaction has a loss and a gain associated with it.

As per the double entry system of bookkeeping, there are two accounts associated with any business organization. Introduced by Italian Lucas Pacioli in 1494, this system was primarily developed in England and has been regularly used in that country.

Understanding the double entry system:

The double entry system specifically involves two accounts such as cash account, which to a great extent would be increased and liability account where those loans that are to be paid would increase.

Basing itself on the concept of, ‘’Somebody’s loss being another person’s game’’, it is imperative that there are double accounts in consideration of credit entry system.

As per the American measuring standards, every business transaction is specifically associated with liability, asset, expenses and revenue in a collective manner or individual manner. In every business transaction either there is an increase or a decrease in total range. Whereas increase in assets and expenses are debited, on the one hand, decrease in assets and expenditure are credited on the other. Other changes in debit and credit work in an according manner.

The point of recording debit and credit system in regards to same amount is the primary aspect of double entry system.

Specific features:

There are certain specific features that are associated with this concept:

  • Double accounts are to be affected:

The most important aspect associated with this system is the presence of dual accounts, the credit, and debit system. Though certain transactions have more than two accounts in specific cases, however, the amount pending both on credit and debit account tends to be similar.

  • There is dual aspect in every transaction:

It is to be noted that every debit has a specific credit associated with it, hence when counting is made it both these accounts are taken into consideration in a simultaneous matter.

  • Account is to be divided into two specific parts:

There are books of original account as journal and subsidiary against which the ledger account is to be placed. The left side is taken as debit while right side can be taken as credit.

  • Segregation of amount column:

This amount column is specifically divided into Debit side and Credit side.

  • Accounting concepts and convention:

To maintain the book of accounts in a correct manner, in most cases, the double entry system is followed.

  1. Preparation of trial balance:

There are two stages of recording in a double entry system. Initially, every business transaction is recorded in a subsidiary book or a journal. It is based on accounting details of these books that ledger accounts are prepared. Details from this ledger accounts are now specifically used for preparing trial balance and which itself tests arithmetical accuracy of accounting that has been made.

  1. Preparation of final accounts:

It is the final accounts that are prepared that helps in determining profit and loss aspects of a particular business organization. Trial balance that is prepared based on balance of ledger accounts has both credit and debit balances associated with it. When equated, it can be found that both these columns have similar end results.

In case of Income statements as Trading, Profit and Loss account as well, there are specific credit and debit sides associated. Such division can be seen in case of Balance sheet as well, and this preparation of data and presentation of that in a categorical manner depicts usage of a specific Double Entry System in case of accounting.

Positives associated with Double Entry System:

There are certain specific advantages that are associated with this system of accounting which ensures that every detail available can be used for further compilation of financial details.

  • Detailed information of the records:

Since business deals are associated with assets, expenses, revenue, capital and liabilities on a greater note, hence with help of this system a detailed note can be maintained, which can also act as a reliable fall-back option in case of any discrepancy.

  • Complete details of profit and loss:

With help of this double entry system, the Trading Account can be formed which is associated with deriving the gross profit and loss amount. Also, with Profit and Loss account that is framed with help of this system, net profit or loss that an organization has incurred can also be seen.

  • Detailed knowledge of assets and liabilities:

The Balance Sheet that is prepared helps in segregating assets and liabilities and keeping track of the company’s financial position.

  • Fraudulence:

Since there is a detailed description of assets and liabilities as well as profit and losses incurred by a company, hence chances of any unaccounted income or expenditure can be immediately brought to notice.

  • Comparative studies:

With the help of a Balance Sheet that is prepared with double-entry system, financial statements can be both compared on an annual basis as well as comparative analysis of actual performance obtained against desired performance.

Problems associated with Double Entry System:

These are certain areas which do not have any solution when this system is being used.

  • Errors of principle:

Since this system is specifically associated with balancing credit and debit side, hence it does not have capacity to check out discrepancies when cash sales account is being debited from cash account.

  • Errors of omission:

The major issue associated with this form of accounting is that, in case of detecting errors, it is important that there be a detailed format. In case of any discrepancy, if the recording is not available in the book, then it is very difficult to find out errors.

  • Compensation of errors:

Since this system is based on equating of credit with debit accounts, it may so happen that when a particular account is credited with a certain amount of money, another account is debited for the same amount. Though, equality of both accounts can be obtained, but this mistake remains.

Basis of Accounting:

When the concept of revenue is to be introduced in regards to Accounting, it is important to understand timing associated with the revenue along with incurred costs.

This can be differentiated as Cash Basis and Accrual Basis.

Defining Accrual Basis:

In case of this system, both cost and revenue are taken into consideration in its period of occurring rather than its period of actual payment. Technically speaking, revenue and cost are generated only at a time when legal right and obligation to make and provide payment is recognized.

Since this format takes into account date of transaction matching of revenue can be done which can also help in determining actual revenue that is earned during this period.

Example: Generally, credit sale for the month of October 2006, is to be recognized only in January 2007, but it will be recorded in the Books of Accounts in the month of October 2006 itself. In case of salary itself, it will be taken into consideration in the month of November 2006 itself.

Defining Cash Basis:

In this case, cost is said to be recognized though actual payment and receiving is done in the form of cash. Since, this mode is applied only when there is doubt regarding actualization of payment that is to be made, so for sales on hire, payment is made on the basis of installment over a limited period. Sales for those parts are to be complete which has received its expected payment. In case of government organizations as well as professionals, account is prepared in this cash basis.

Example: When salary for month of November 2006 is paid on December 2006, date recorded in Book of Accounts would be of December 2006. Also, credit sale rather than being recorded on date of sale would be recorded on date on which payment has been received.

However the major backlog of this system rests in the fact that in this case revenue is matched with cost to get actual profit rate.

A detailed understanding of this Double Entry system is to be understood for better application of its concepts.

 

Links of Previous Main Topic:-

Links of Next Financial Accounting Topics:-

Your Price: $15.00 $13.99 🔥

Pricing may change based on requirements

Get Homework Help In

Maths and Statistics

Science

Humanities & Arts

l

Essay Writing

How Our Homework Service Works

FAQ number 1

Share your requirements

FAQ number 2

Make secure payment

FAQ number 3

Get homework answers

FAQ - Our Homework Help Services

We have put together some commonly asked questions.

K
L

Is there a website that can do my homework?

Yes, if you are looking for such a site, MyHomeworkHelp is one of the leading homework help websites that can do your homework and assist with various academic needs. Here's all you need to know about our team and how they provide flawless homework help.

If you find yourself thinking, "I need to pay someone to do my homework," our team is ready to assist. It's common for students to seek help with their homework, and our experts are prepared to provide personalized support tailored to your needs.

You can visit www.myhomeworkhelp.com to get all types of homework-related help from our experts.

K
L

What is the best homework help website?

The best homework help website enhances students' experience of getting homework assistance from experts. MyHomeworkHelp, recognized as one of the best online homework help platforms, serves as both a guide and a solution provider for students. We've been rocking the homework help scene since 2012, assisting over 20k students, and we must be doing something right because more than 70% of them keep coming back for more. Whether you need help understanding concepts, completing assignments, or getting your homework done, MyHomeworkHelp is here to support your academic journey as the best college homework website.

K
L

How can I get help with my homework?

1. Tell us your homework details

To get started with online homework help, simply choose the type of homework assistance you need. When filling out the order form, make sure to provide detailed instructions, including the deadline, number of pages, grading rubric, and any other relevant information.

2. Confirm your order

Review the details of your homework order and proceed to make a secure payment using VISA, Mastercard, or PayPal. Once the payment is processed, our experts will begin working on your homework immediately.

3. Receive your order

The completed homework will be delivered directly to your email. This ensures that students receive their homework assistance on time and can meet their academic requirements without stress.

K
L

Do you guarantee plagiarism-free homework answers?

We take academic integrity very seriously and understand the importance of providing homework answers free of plagiarism. Our tutors are committed to delivering original and unique content for every assignment. Here are the steps we take to ensure your homework is plagiarism-free:

  1. Original Work: Each assignment is completed from scratch based on your specific requirements and guidelines.
  2. Expert Tutors: Our tutors are highly qualified and experienced in their respective fields, ensuring the work they produce is both original and high-quality.
  3. Plagiarism Detection: We use advanced plagiarism detection software to scan every assignment before delivery. This ensures that the content is unique and free of any copied material.
  4. No AI Usage: We guarantee that all work is 100% human-crafted expertise, with no AI-generated content involved. This ensures the authenticity and quality of the work provided.
  5. Quality Assurance: Our quality assurance team reviews each assignment for originality and adherence to academic standards before it is sent to you.

By following these stringent measures, we guarantee that the homework answers you receive are completely free of plagiarism and AI involvement. You can trust us to provide you with original and high-quality academic assistance.

For more information on our guarantees, please visit our guarantees page.

K
L

Is your homework service confidential?

Absolutely! Confidentiality is one of the basic guarantees of our service at MyHomeworkHelp.com.

When our customers make their homework orders, they know their information remains 100% confidential.

Even your homework writer will not be provided with your personal details. So, when you hire a professional homework helper on our website, rest assured that your information will remain private and safe.

For a comprehensive understanding of how we protect your privacy, please refer to our Privacy Policy.

K
L

How much do I need to pay to get my homework done?

We do not have monthly fees or minimum payments for our services. Each homework assignment is quoted a unique price, based on the tutor’s estimate of the time required to complete your work. There are no obligations, and you are free to discuss the price quote with the tutor.

When you decide to pay someone to do my homework, our pricing starts at $13.99 per page. The final pricing depends on various factors including the page count, deadline, nature of the task, and the homework writer’s level of expertise.

We offer flexible payment options, allowing you to make a partial payment to start working on your assignment and pay the remaining amount upon completion. This ensures no pressure of up-front payment and no hidden order costs.

Our dynamic pricing model takes into account the type of assignment, its urgency, and the complexity of the task. For instance, shorter deadlines and more complex assignments may increase the price. You can get an instant quote by selecting your assignment type, deadline, and page count on our website.

Get the help with your homework at competitive rates, tailored to your specific needs and deadlines. For more detailed information on pricing, please visit our pricing page.

K
L

Who are the experts who will help me with my homework?

We work with subject experts from all over the world. We hire them with the help of complex tests in the disciplines of their expertise. We also verify the IDs and academic transcripts of our homework writers to be sure that our experts have a bachelor's or master’s or a PhD degree. This is how we can be sure of the proficiency of our panel of experts who will help you with your homework. Here's all you need to know about our team and how they provide flawless homework help.

  1. Our team comprises top-tier homework helpers who excel in addressing and resolving questions on various topics. Each tutor effectively utilizes their expertise to concentrate on the core subject matter and thoroughly analyze it.
  2. Our professional tutors specifically craft each assignment tailored to students' requirements, including preferred formats, citation styles, and essential elements.
  3. Whether it’s coursework, dissertations, essays, or case studies, our platform guarantees timely college homework help across a wide range of academic papers. Don’t hesitate any longer; connect with our tutors when you seek help with your homework for perfect assignment solutions and improved grades.

K
L

Can I chat with my homework helper for updates?

Yes, you can certainly chat with your homework helper on our secure chatboard platform. MyHomeworkHelp.com provides a direct communication channel between you and your assigned expert (while maintaining privacy). This feature allows you to ask questions, clarify instructions, and provide additional information about your homework order to ensure that the help you receive is tailored to your specific needs.

You'll be notified by email whenever there are new messages for you, but we advise regularly checking your personal page to ensure no critical updates from your writer are overlooked.

Should you have an urgent matter to address, do not hesitate to contact the support team for assistance. This system ensures that students can stay updated on their homework paper progress and maintain clear communication with their experts.

K
L

What makes you the best homework helper?

MyHomeworkHelp is ranked as one of the best online homework helpers, providing exceptional support to students. We've been excelling in the homework assistance arena since 2012, assisting over 200k students, and consistently achieving high satisfaction rates, with more than 70% of our students returning for additional help. But do not take our word for it! See our independent reviews on google, facebook, sitejabber, and on Trustpilot. For all collated reviews, see here

We ensure our prices remain competitive and offer attractive discounts to make our services accessible. Our commitment to delivering plagiarism-free solutions guarantees the integrity and originality of your assignments. These attributes, combined with our dedication to personalized support and timely delivery, establish MyHomeworkHelp as the premier homework helper for all your academic needs.

K
L

How will I receive my homework order?

You'll receive the initial version of your paper as a secure, non-editable PDF within your specified deadline. This allows you to review the content and decide if any revisions or edits are required. Our homework service will refine the homework paper based on your feedback.

Should the document meet your expectations and not require any changes, you can simply approve the order and access the editable Word .doc file.