A double-entry accounting system is an accounting system:
A)That records each transaction twice.
B)That records the effects of transactions and other events 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 may only be used if T-accounts are used.
E)That insures that errors never occur.

Question

Quizplus · Accepted Answer

A double-entry accounting system records each transaction in at least two accounts with equal debits and credits. This ensures the accounting equation (Assets = Liabilities + Equity) remains in balance and helps prevent errors. A double-entry system does not necessarily require the use of T-accounts and does not guarantee that errors never occur. Option A is partially correct, but it is not the defining characteristic of a double-entry system. Option C is incorrect as each transaction must have equal debits and credits.

A Double-Entry Accounting System Is an Accounting System