A Double-Entry Accounting System Is an Accounting System

question 3

Multiple Choice

A double-entry accounting system 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.

---

Definitions:

Raw Materials

The basic materials that are processed and converted through manufacturing into finished goods.

Factory Utilities

Costs incurred for utilities in a manufacturing setting, such as electricity, gas, and water, essential for production operations.

Gross Profit

Monetary gain made after subtracting the cost of goods sold from total sales revenue, indicating the efficiency of a company's core business activities without including overhead costs.

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, typically a fiscal quarter or year, to calculate the net income or loss.