Regarding the Double-Entry System,which of the Following Statements Is Incorrect

question 46

Multiple Choice

Regarding the double-entry system,which of the following statements is incorrect?

• A) A transaction would be incomplete if only one side were recorded.
• B) Because of technology, the use of the double-entry system of accounting is optional.
• C) The double-entry system is a system of accounting in which every transaction affects at least two accounts.
• D) If office supplies are purchased on account, the account Office Supplies increases and the account Accounts Payable increases.

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Definitions:

Surpluses

Occurs when the quantity of a good produced exceeds the quantity demanded, often leading to price reductions.

Inflationary Gap

A situation where the demand for goods exceeds supply at the current price levels, leading to an increase in prices and inflation.

Equilibrium GDP

The level of Gross Domestic Product where the aggregate supply equals aggregate demand within an economy, leading to a stable economic condition.

Full Employment GDP

The level of GDP produced when the economy is utilizing all available resources, including labor, at the maximum sustainable rate without causing inflation.