Advantages of Double Entry System

The advantages of this system are as follows:

i. Scientific system: This is the only scientific system of recording business transactions. It helps to attain the objectives of accounting

ii. Complete record of transactions: This system maintains a complete record of all business transactions.

iii. A check on the accuracy of accounts: By the use of this system the accuracy of the accounting work can be established by the preparation of trial balance.

iv. Ascertainment of profit or loss: The profit earned or loss occured during a period can be ascertained by the preparation of profit and loss account.

v. Knowledge of the financial position : The financial position of the concern can be ascertained at the end of each period through the preparation of balance sheet.

vi. Full details for control: This system permits accounts to be kept in a very detailed form, and thereby provides sufficient informations for the purpose of control.

vii. Comparative study : The results of one year may be compared with those of previous years and the reasons for change may be ascertained.

viii. Helps in decision making: The mangement may be able to obtain sufficient information for its work, especially for making decisions. Weaknesses can be detected and remedial measures may be applied.

ix. Detection of fraud: The systematic and scientific recording of business transactions on the basis of this system minimises the chances of fraud.