Which manual bookkeeping system has a built-in way to check for errors by ensuring that total debits always equal total credits?

• A. Cash basis accounting system
• B. Double-entry bookkeeping system
• C. Single-entry bookkeeping system
• D. Accrual basis accounting system

Answer: (B)

Verified step by step guidance

1. Understand the concept of double-entry bookkeeping: This system is designed to ensure that every financial transaction is recorded in at least two accounts, with one account being debited and the other credited. This ensures that total debits always equal total credits, providing a built-in error-checking mechanism.
2. Compare the double-entry bookkeeping system with other systems mentioned: Single-entry bookkeeping records transactions in only one account, which does not provide a way to check for errors through balancing debits and credits. Cash basis and accrual basis accounting systems are methods of recognizing revenue and expenses, not systems for recording transactions.
3. Recognize the importance of the error-checking feature: The double-entry system helps detect errors such as omitted transactions, incorrect amounts, or misclassified accounts, as the accounting equation (Assets = Liabilities + Equity) must always balance.
4. Identify the key advantage of double-entry bookkeeping: It provides a comprehensive view of financial transactions and ensures the integrity of financial statements by maintaining the balance between debits and credits.
5. Conclude that the double-entry bookkeeping system is the correct answer because it is specifically designed to ensure that total debits always equal total credits, unlike the other systems listed.