Each time a financial transaction occurs, you must record a journal entry that includes which of the following?

• A. Only credits for revenue transactions
• B. At least one debit and at least one credit
• C. Only a single debit or a single credit
• D. Only debits for expense transactions

Answer: (B)

Verified step by step guidance

1. Understand the concept of double-entry accounting: In financial accounting, every transaction must be recorded in at least two accounts, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.
2. Identify the components of a journal entry: A journal entry must include at least one debit and at least one credit. This is a fundamental rule of double-entry accounting.
3. Analyze the options provided: The first option, 'Only credits for revenue transactions,' is incorrect because revenue transactions also require a debit entry to balance the credit. The third option, 'Only a single debit or a single credit,' is incorrect because every transaction must have both a debit and a credit. The fourth option, 'Only debits for expense transactions,' is incorrect because expense transactions also require a credit entry to balance the debit.
4. Select the correct answer: The correct answer is 'At least one debit and at least one credit,' as this aligns with the principles of double-entry accounting.
5. Apply this knowledge to future problems: Always ensure that every journal entry includes at least one debit and one credit, and that the total debits equal the total credits to maintain the balance in the accounting equation.