Question

In double entry system of book-keeping every business transaction affects ________________________.

• A. Two accounts with equal but opposite effect.
• B. Two sides of the same account.
• C. The same account on two different dates.
• D. All of the above

Answer 1

The correct option is A Two accounts with equal but opposite effect.

The double entry system of bookkeeping is based on the fact that every transaction has two parts and that this will therefore affect two ledger accounts. Every transaction involves a debit entry in one account and a credit entry in another account.