Advantages of Double Entry System

(i) Since personal and impersonal accounts are maintained under the double entry system,
both the effects of the transactions are recorded.
(ii) It ensures arithmetical accuracy of the books of accounts, for every debit, there is a
corresponding and equal credit. This is ascertained by preparing a trial balance
periodically or at the end of the financial year.
(iii) It prevents and minimizes frauds. Moreover frauds can be detected early.
(iv) Errors can be checked and rectified easily.
(v) The balances of receivables and payables are determined easily, since the personal
accounts are maintained.
(vi) The businessman can compare the financial position of the current year with that of the
past year/s.
(vii) The businessman can justify the standing of his business in comparison with the previous
years purchase, sales, stocks, in comes and expenses with that of the current year figures.
(viii) Helps in decision making.
(ix) The net operating results can be calculated by preparing the Trading and Profit and
Loss A/C for the year ended and the financial position can be ascertained by the
preparation of the Balance Sheet.
(x) It becomes easy for the Government to decide the tax.
(xi) It helps the Government to decide sickness of business units and extend help accordingly.
(xii) The other stakeholders like suppliers, banks, etc take a proper decision regarding grant
of credit or loans.