A way of bookkeeping that tracks which accounts increase and which decrease for a given transaction is known as:

A way of bookkeeping that tracks which accounts increase and which decrease for a given transaction is known as:

• A. Single-entry
• B. Triple-entry
• C. Multi-entry
• D. Double-entry

Answer: (D)

Double-entry bookkeeping is the method where every transaction affects at least two accounts with opposite sides—debits and credits—so the total amount recorded on the two sides balances. This structure keeps the accounting equation in balance (Assets = Liabilities + Equity) and provides a complete trail of how a transaction changes the financial position. For example, earning revenue by receiving cash increases Cash (an asset) and increases Revenue (part of Equity), so debits and credits match. Similarly, paying an expense with cash debits the Expense account and credits Cash, again reflecting the dual impact. This approach contrasts with single-entry systems, which track only one side of a transaction and don’t provide a full picture of how each transaction shifts different accounts. Terms like triple-entry or multi-entry aren’t standard in basic bookkeeping, so they aren’t the recognized method for recording these dual effects.

Double-entry bookkeeping is the method where every transaction affects at least two accounts with opposite sides—debits and credits—so the total amount recorded on the two sides balances. This structure keeps the accounting equation in balance (Assets = Liabilities + Equity) and provides a complete trail of how a transaction changes the financial position. For example, earning revenue by receiving cash increases Cash (an asset) and increases Revenue (part of Equity), so debits and credits match. Similarly, paying an expense with cash debits the Expense account and credits Cash, again reflecting the dual impact.

This approach contrasts with single-entry systems, which track only one side of a transaction and don’t provide a full picture of how each transaction shifts different accounts. Terms like triple-entry or multi-entry aren’t standard in basic bookkeeping, so they aren’t the recognized method for recording these dual effects.