Importance of double-entry accounting system for the public limited company (basic account)

1. Presented by
Rishi Ram Khanal
Bim 3rd (TU)
Importance of double entry
accounting system for public
limited company
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2. CONTENT
 Introduction
 Uses of double entry system.
 Advantages of double entry accounting system for
public limited company.
 Disadvantages of double entry accounting system
for public limited company.
 conclusion
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3. Introduction
 Scientific, systematic and complete recording
system of every financial transactions
 Recognizes the fact that every transactions has
two equal and offsetting account.
 The change in one account called a debit and
the change in another account called a credit.
 Helps to know the financial position and
operating result of an organization.
 Company whose securities are traded on a stock
exchange and can be bought and sold by anyone
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4. Uses of double entry system.
 Recordings of information in chronological order
 Analyze the transactions
 Summarize the information
 Preparations of different financial statements like
trading. Profit & loss account, Balance Sheet
 Which helps in determining financial position and
operating result.
 Communicating the result to concern authority.
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5. Advantages of double entry
accounting system for public limited
company.
 Complete records of every transactions
 Reliable information at a glance
 Knowledge of gross and net profit or net loss
 Cost control
 Detection of frauds and errors
 Presents the financial position
 Helps in comparative studies
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6. Disadvantages of double entry
accounting system for public limited
company.
 Error of complete omission
 Error of principle
 Compensating error
 Chances of window dressing
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7. CONCLUSION
 Double entry system in not only useful in
public limited company it is very beneficial in
every organization for the complete record of
each and every transaction.
 Act as a proof in court if necessary
 Helps to know the financial position
 Guideline to utilize the resources of
organization.
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