Question

Write the word / term / phrase which can substitute each of the following Statements.

The system of accounting which is most scientific and reliable.

Answer 1

Double entry system

Explanation: Under single-entry system, only cash and personal accounts are maintained. Dual aspect, i.e. double-entry system, is not followed. Hence, single-entry system is considered unscientific and incomplete. On the other hand, double-entry system is considered as a more scientific and complete system of accounting because dual aspect of a transaction (i.e. both debit and credit aspects of a transaction) is recorded. Transactions related to real, personal and nominal accounts are recorded. Hence, it is considered more reliable.