When a transaction affects more than two accounts, the journal entry is known as what?
Correct answer: A. A compound entry
- A. A compound entry
- B. A closing entry
- C. A transfer entry
- D. A reversing entry
Explanation
An entry involving two or more debit or credit accounts is called a compound entry. It still follows the double-entry rule that total debits must equal total credits.
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About Ledger Accounts and the Trial Balance
Ledger accounts collect transactions under individual headings and use debit and credit sides to determine balances. The trial balance lists those balances to check arithmetical agreement before financial statements are prepared, but it does not reveal every error, such as complete omission, compensating errors or entries made in the wrong account.
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34 free Ledger Accounts and the Trial Balance MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
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