The fact that each transaction has a dual effect on the accounting elements provides the basis for what is called
A) single-entry accounting.
B) compound-entry accounting.
C) multiple-entry accounting.
D) double-entry accounting.

Question

Quizplus · Accepted Answer

Double-entry accounting is based on the concept that each transaction has a dual effect on the accounting elements, meaning that there is a debit entry and a corresponding credit entry in the accounting records. This ensures that the accounting equation (assets = liabilities + equity) remains in balance. Single-entry accounting, on the other hand, only records one entry for each transaction, and is generally used for smaller businesses with less complex financial transactions. Compound-entry and multiple-entry accounting are not commonly used accounting terms.

The Fact That Each Transaction Has a Dual Effect on the Accounting