The System of Accounting Where Each Transaction Affects Two or More

question 8

Multiple Choice

The system of accounting where each transaction affects two or more accounts and the sum of the debit entries equals the sum of the credit entries is called:

• A) single transaction accounting.
• B) two-entry accounting.
• C) double-entry accounting.
• D) debit and credit accounting.

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Definitions:

Catastrophe Bonds

Insurance-linked securities issued by insurance companies to transfer major risks from the issuer to investors, typically used for natural disaster risks.

Asset-Backed Bonds

Bonds that are secured by a pool of assets, such as loans or receivables, which generate the cash flow to pay bondholders.

TIPS

Treasury Inflation-Protected Securities, a type of U.S. Treasury bond designed to help investors protect against inflation.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and is repaid to the investor.