Which of the Following Statements Is True of the Double-Entry

question 11

Multiple Choice

Which of the following statements is true of the double-entry bookkeeping system?

• A) Depreciation is not considered when recording transactions under this system.
• B) Only credit transactions are recorded under this system.
• C) The system records only those transactions that bring in revenue.
• D) The accounting equation is always kept in balance under the system.
• E) A business does not run on a cash basis under the double-entry bookkeeping system.

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Definitions:

Distribution

The process of making a product or service available for the consumer or business user.

Statement of Members' Equity

A financial document that shows the changes in the equity of a company's members or owners over a specific period.

Equity Reporting

The process of disclosing the ownership interest in a company, typically through financial statements, to provide transparency about value to shareholders.

Capital Balance

The amount of equity a partner has in a partnership or an owner has in a business, reflecting the net value of their investment.