For the basic accounting equation to stay in balance each transaction recorded must
A) affect two or less accounts.
B) affect two or more accounts.
C) always affect exactly two accounts.
D) affect the same number of asset and liability accounts.

Question

Quizplus · Accepted Answer

The basic accounting equation (Assets = Liabilities + Equity) stays in balance when each transaction affects two or more accounts, ensuring that the equation remains equal. This is because every transaction has a dual effect under the double-entry accounting system.

For the Basic Accounting Equation to Stay in Balance Each