Double-entry accounting 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

Double-entry accounting is a system that requires recording the effects of transactions and other events in at least two accounts with equal debits and credits. It is a fundamental concept in accounting that helps to ensure accuracy and completeness in financial statements. Choice A is incorrect because each transaction is not necessarily recorded twice, but rather the effects are recorded in two accounts. Choice C is incorrect because each transaction must have at least one debit and one credit, so two debits and no credits would not be allowed. Choice D is incorrect because T-accounts are just one of many tools used in double-entry accounting, but not necessary for the system to be used. Choice E is incorrect because errors can still occur even with double-entry accounting, but the system does help to minimize them.

Double-Entry Accounting Is an Accounting System