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Question

In double Entry system of Book-keeping every business transaction affects __________.


A
Two accounts.
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B
Two sides of the same account.
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C
The same account on two different dates.
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D
All of these.
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Solution

The correct option is A Two accounts.

Because every business transaction affects at least two accounts, our accounting system is known as a double-entry system. 

For example, when a company borrows $1,000 from a bank, the transaction will affect the company's Cash account and the company's Notes Payable account.


Fundamentals of Accounting and Auditing

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