Does my accounting program use double-entry bookkeeping?

Misbah Jalal Siddiqui

Does my accounting program use double-entry bookkeeping?

You are here:

Accounting Program

Single-entry bookkeeping is a simple type of financial recordkeeping used by individuals and businesses that don’t carry unpaid client balances, have only a few employees, and don’t owe people money.[1] Generally businesses that 1) have less than $5 million in annual gross sales or less than $1 million in gross receipts for inventory sales, 2) are not a C Corporation, 3) operate a service business, and 4) collect customer payments at the point of sale, may use a single-entry bookkeeping system.[2] Since most law firms do not collect customer payments at the point of sale, even though the law firm may not be a C Corporation and does not keep inventory on hand, they should still use a double-entry bookkeeping system.

Single-entry bookkeeping systems are all manual, paper systems.[3] All computerized accounting programs are double-entry bookkeeping systems, which means that each financial transaction affects two general ledger accounts.[3]

You may think that your computerized accounting program is a single-entry bookkeeping system because you only enter one general ledger account when recording the transaction. But your computerized system is a double-entry system because it automatically enters the information into the second general ledger account. For example, if you enter a check, the accounting program automatically deducts the transaction amount from your bank account balance. By selecting “check”, “withdrawal”, “deposit”, etc.  the program automatically knows that a cash account is being affected and it automatically makes enters the transaction into the cash account. So, although you don’t see the accounting program assign a second general ledger account to a transaction, rest assured that the transaction absolutely does affect two accounts as required in a double-entry system.


1. Why Your Small Business Needs Double-Entry Accounting
2. Accounting Training, Tips, and News
3. Single entry system

Sign up now to get more tips and news from CosmoLex

How can CosmoLex improve your law practice?

Book A Demo

Search Resources

Recent Articles

Table of Contents