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GCE Financial Accounting 1989 Question 23

Question 23

Double Entry and the Ledger

The concept of Double Entry Book-Keeping states that

  1. A.if you receive goods on credit the seller becomes your creditor
  2. B.for every debit entry there must be a corresponding credit entry
  3. C.one party receives and another party gives value
  4. D.purchases and sales are stated separately
  5. E.for every seller there is a buyer.
Show the answer and explanation

Answer: B (for every debit entry there must be a corresponding credit entry)

Explanation

Double entry: every transaction is recorded twice, a debit in one account and an equal credit in another.