A double-entry accounting system is an accounting system:
A)That records each transaction twice.
B)That records the effect of each transaction in at least two accounts with equal debits and credits.
C)In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.
D)That allows total credits to be greater than total debits.
E)That allows total debits to be greater than total credits.

Question

Quizplus · Accepted Answer

A double-entry accounting system records the effect of each transaction in at least two accounts with equal debits and credits. This ensures that the accounting equation (assets = liabilities + equity) remains balanced after each transaction. Option A, C, D, and E are incorrect as they do not capture the essence of a double-entry accounting system.

A Double-Entry Accounting System Is an Accounting System