The double-entry system of accounting is a method of bookkeeping that helps a company maintain its accounts and keep them balanced, which shows the true picture of the finances of the company. In this system, all transactions of a company are maintained in a book, and double-entry books have two opposite and corresponding entries that are known as credit and debit. The double-entry system is based on the Dual Aspect Concept, which is based on the fundamentals of accounting principles. The Dual Aspect Concept is based on the principle that every transaction has two aspects, debit and credit, and both aspects should be recorded in the books of accounts. The double-entry system is used to satisfy the accounting equation: Assets = Liabilities + Equity.

Features of the double-entry system of accounting include:

• It maintains a complete record of each transaction.
• It recognizes at least two aspects of every transaction, i.e., debit and credit.
• In this system, one aspect is debited, and another aspect is credited as per the rules of debit and credit.
• The total of all debits is always equal to the total of all credits.
• It also helps in establishing the arithmetical accuracy of accountancy records by preparing the trial balance.

Benefits of the double-entry system of accounting include:

• It is a scientific system of recording business transactions, and two sides of a transaction are recorded on the basis of scientific and logical rules, due to which there are fewer chances of errors.
• The accuracy of the accounting work can be established by the use of this system, by preparing the trial balance.
• The profit earned or loss suffered during a period can be found out by preparing the profit and loss account.
• The financial position of the business can be ascertained at the end of the accounting period by preparing the balance sheet.

In contrast, single-entry accounting records transactions in only one account, whereas double-entry accounting records transactions in at least two different accounts. The primary disadvantage of the double-entry accounting system is that it is more complex and requires two entries to be recorded when one transaction takes place.