The Double-Entry System Requires That Each Transaction Must Be Recorded

question 1

Multiple Choice

The double-entry system requires that each transaction must be recorded

• A) in at least two different accounts.
• B) in a T account.
• C) first as a revenue and then as an expense.
• D) twice.

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Definitions:

Net Sales

Net sales are the total revenue from goods or services sold by a company, after deducting returns, allowances for damaged or missing goods, and discounts.

Sales Warranty Accrual Method

A method used in accounting to set aside a portion of sales revenue to cover future warranty claims, ensuring that warranty expenses are matched with related sales in the same period.

Warranty Expense

The estimated cost of honoring product warranties, recognized as an expense by companies.

Implied Service Contract

A legal agreement created by the actions, situation, or circumstances of the parties involved rather than written or spoken words.