The double-entry system of accounting records the dual effects on the entity.

Question

Quizplus · Accepted Answer

The double-entry system of accounting is based on the principle that every financial transaction has equal and opposite effects on the entity's assets, liabilities, and equity. This means that all transactions are recorded with a debit entry and a credit entry in two different accounts, which ensures that the accounting equation (assets = liabilities + equity) remains balanced. Therefore, the statement that the double-entry system of accounting records the dual effects on the entity is true.

The Double-Entry System of Accounting Records the Dual Effects on the Entity