In recording business transactions using the double entry method (as described in Chapter 3), which of the following statements is true
A) Both entries must increase accounts
B) One account must increase and the other account must decrease
C) Either or both the accounts may increase or decrease
D) Both entries must decrease accounts

Question

Quizplus · Accepted Answer

In double-entry accounting, each transaction affects two or more accounts. These accounts can either increase or decrease, depending on the nature of the transaction. This system ensures the accounting equation (Assets = Liabilities + Equity) remains balanced.

In Recording Business Transactions Using the Double Entry Method (As