Double entry system of book-keeping refers to a system where, _____________________.

the number of accounts with a debit balance must agree with the number of accounts with the credit balance

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each transaction is recorded twice, once in journal and then in ledger

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equal debit and credit entries are made for each transaction

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each transaction is recorded in two set of account book

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Solution

The correct option is C equal debit and credit entries are made for each transaction
Double Entry System of accounting is based on the dual aspect of accounting. It says that every transaction will have two effects in books of account.
For every debit , there will a credit of similar amount and vice versa.

For example, Goods worth Rs. 1000 purchased for cash. There are 02 accounts which are affecting here i.e. cash is going out of Rs.1000 and Goods are coming for Rs.1000.

Hence, it is true that equal debit and credit entries are made for each transaction.

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Similar questions

Ananya withdrew Rs. 2,000 per month for personal use, recording each transaction as a debit to her drawing account and a credit to her cash account. The journal entry closing the drawing account requires a credit to _______ account & debit to _______ account.

Q. ______ concept is based on double entry book-keeping which means that accounting system is set up in such a way that a record is made of the two aspects of each transaction that affects the records.

State whether the following statements are true or false:

(1) A journal voucher is must for all transactions recorded in the journal.
(2) Journal is a book of secondary entry.
(3) Narration is not necessary for each and every journal entry.
(4) Every transaction is recorded first in the journal.
(5) Live Stock A/c is a Nominal A/c.
(6) Bank of Maharashtra A/c is a Nominal A/c.
(7) Brokerage paid on sale of goods is debited to brokerage A/c.
(8) If the goods are sold the entry should be recorded in the journal.
(9) Goods withdrawn by the proprietor from business is debited to the Drawing A/c.
(10) Cash discount does not appear in the books of accounts.
(11) If rent is paid to the landlord, landlord’s A/c should be debited.
(12) Book keeping records monetary transactions only.
(13) Drawings made by the proprietor increases his capital.
(14) Premium paid on the life policy of the proprietor should be debited to insurance premium account.

Q. If the debit and credit aspects of a transaction are recorded in the cash book it is a:

State whether the following statements are True or False.

1) Prepaid insurance is nominal account.
2) Personal transactions of proprietor are recorded in the books of account of business.
3) Every debit has equal and corresponding credit.
4) Loan account is personal account.
5) Drawing account is a real account.
6) Commission received is a nominal account.
7) Outstanding wages is a nominal account.
8) Bank of India is an example of real account.
9) An order placed for the goods, entry is passed/recorded in the book of account.
10 Every transaction has only on effect

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