Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
, see all updates

Examining Accounts: Accounting Systems: Single and Double-Entry Books

Any set of accounts which includes a balance sheet will be prepared on double-entry lines, but in the majority of cases this does not mean that the records will have been kept on a double-entry basis. Where records are incomplete the accounts only balance because of the introduction of estimates and balancing figures. If a more comprehensive accounting system is maintained but falls short of double-entry the accountant may ‘complete’ the double entry after the end of the year, either in the client’s own nominal ledger or in his or her own papers. There may be a full set of sales and purchases ledgers in such a system, but the lack of a nominal ledger means it is single-entry.

The fact that an accounting system is double-entry and every transaction is recorded twice as a debit and a credit in the records, does not necessarily guarantee its accuracy. There will be more books to maintain than in a simple single-entry cash book system and it may therefore require more ingenuity to circumvent. However, the vital factor is the integrity of the figures recorded, no matter how allegedly comprehensive the accounting system. This is true of a computerised accounting system too.