The differences between single-entry and double-entry accounting:

1. Single-Entry Accounting:

   • Definition: Single-entry accounting records each financial transaction only once, either as a debit or credit in a single account.
   • Process:
     • Simple and straightforward.
     • Typically used by small businesses with low transaction volumes.
     • Commonly used for cash-based accounting.
   • Example:
     • Recording cash inflows and outflows directly in a cash register.
     • Tracking income and expenses without considering complex accounting principles.

2. Double-Entry Accounting:

   • Definition: Double-entry accounting records each transaction in at least two accounts, as corresponding debits and credits.
   • Process:
     • More comprehensive and accurate.
     • Requires recording both the source and use of funds.
     • Ensures that total debits equal total credits.
   • Example:
     • When a business sells a product, it records both the revenue (credit) and the decrease in inventory (debit).
     • Tracks not only cash but also other assets, liabilities, and equity.

In summary:

• Single-Entry Accounting: Simple, but lacks checks and balances.
• Double-Entry Accounting: Comprehensive, accurate, and widely used for financial reporting.