See earlier articles on what are self-balancing ledgers and the difference between self balancing ledgers and section balancing ledger. Below tabulates the advantages and disadvantages of using the self-balancing ledgers:
Advantages of having self-balancing ledgers:
- Localizes the errors and facilitates in quick detection with minimum efforts;
- Facilitates division of work amongst different accounting staffs in the Accounts department;
- Responsibility for committing errors can be fixed;
- Possibility of collusion is lessen as the ledgers are maintained by different accounts staff;
- Facilitates the preparation of interim accounts and draft final accounts
Disadvantages of having self-balancing ledgers:
- Adds more challenges to small concerns re: more costly to maintained ( hiring separate staff to maintain these ledgers)
- More clerical work as the need to maintain additional columns in subsidiary books.
|