Answered

Welcome to Westonci.ca, the ultimate question and answer platform. Get expert answers to your questions quickly and accurately. Join our Q&A platform to connect with experts dedicated to providing accurate answers to your questions in various fields. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

Two entries are required to keep the accounting equation balanced. Two entries are required to keep the accounting equation balanced.
A: True
B: False

Sagot :

masifakrami

Answer:

The statement "Two entries are required to keep the accounting equation balanced" is:

A: True

Explanation:

In accounting, every transaction affects at least two accounts to keep the accounting equation balanced. The accounting equation is:

[tex]\[ \text{Assets} = \text{Liabilities} + \text{Owner's Equity} \][/tex]

This principle is known as double-entry accounting. Each transaction has a dual effect on the accounting equation, ensuring that the equation remains balanced. For every debit entry made to one account, there is a corresponding credit entry to another account of an equal amount.

For example:

- If a company purchases equipment for $5,000 in cash, the entries would be:

 - Debit: Equipment (Asset) $5,000

 - Credit: Cash (Asset) $5,000

In this case, one asset (equipment) increases while another asset (cash) decreases by the same amount, keeping the accounting equation balanced.

Therefore, two entries (one debit and one credit) must keep the accounting equation balanced, validating the statement as true.

We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.