Which of the following statements is accurate regarding double-entry bookkeeping?

• A. Credits are only used to record decreases in asset accounts.
• B. Only revenue transactions require both a debit and a credit entry.
• C. Debits always increase all types of accounts.
• D. Every transaction affects at least two accounts, with total debits always equaling total credits.

Answer: (D)

Verified step by step guidance

1. Understand the concept of double-entry bookkeeping: Double-entry bookkeeping is a fundamental accounting principle where every transaction affects at least two accounts, ensuring the accounting equation (Assets = Liabilities + Equity) remains balanced.
2. Clarify the role of debits and credits: Debits and credits are used to record changes in accounts. Debits increase asset and expense accounts, while credits increase liability, equity, and revenue accounts. They work together to maintain balance in the ledger.
3. Analyze the statement 'Credits are only used to record decreases in asset accounts': This is incorrect because credits can also increase liability, equity, and revenue accounts.
4. Evaluate the statement 'Only revenue transactions require both a debit and a credit entry': This is incorrect because all transactions in double-entry bookkeeping require both a debit and a credit entry, regardless of the type of transaction.
5. Confirm the correct statement: The accurate statement is 'Every transaction affects at least two accounts, with total debits always equaling total credits.' This reflects the essence of double-entry bookkeeping, ensuring the ledger remains balanced.