Double-entry accounting means that every transaction affects and is recorded in at least two accounts.  True False

Final Answer

True.

Double-entry accounting is a fundamental concept in accounting that ensures the accounting equation (Assets = Liabilities + Equity) remains balanced after every transaction. In this system, each financial transaction is recorded in at least two accounts: one account will be debited, and another will be credited for the same amount. This dual recording provides a more comprehensive view of a company’s financial situation and helps to identify any discrepancies or errors within the records. For example, if a business buys inventory for cash, the inventory account increases (debit), and the cash account decreases (credit), ensuring that the total balance remains consistent. This method enhances accuracy and accountability in financial reporting.