What are the advantages and disadvantages of having self balancing ledgers

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.

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