Double-Entry Accounting Is an Accounting System

question 121

Multiple Choice

Double-entry accounting 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 the impact of each transaction 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

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Definitions:

Profitable

A financial status where the income generated from business activities exceeds the expenses, taxes, and costs associated with maintaining the business.

Marginal Revenue

The additional revenue that a company earns from selling one more unit of a product or service.

Marginal Cost

The rise in expense associated with the production of an extra unit of a product or service.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it measures the variable cost per unit of output.