A compound entry is
A) a transaction involving more than one debit and/or credit.
B) used to prepare the trial balance.
C) the same as the chart of accounts.
D) found on the income statement.

Question

Quizplus · Accepted Answer

A compound entry refers to a transaction that involves more than one debit and/or credit, making it a more complex entry than a simple entry which involves only one debit and one credit. Compound entries are common in accounting as they are used to record various types of transactions such as adjusting entries, accruals, prepayments, and more. Therefore, option A is the correct choice. Option B is incorrect as the trial balance uses account balances, not compound entries. Option C is incorrect as the chart of accounts is just a list of accounts used by an organization. Option D is incorrect as compound entries may be used for different types of transactions, not just on the income statement.

A Compound Entry Is