The key premise underlying double-entry bookkeeping is that financial transactions must be recorded as if they have opposite and equal effects.

Question

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In double-entry bookkeeping, each financial transaction is entered as both a debit and a credit in two separate accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced. This reflects the principle that every transaction has two sides, affecting the financial statements in opposite but equal ways.

The Key Premise Underlying Double-Entry Bookkeeping Is That Financial Transactions