What does the term 'double-entry accounting' mean?

The term 'double-entry accounting' refers to the fundamental concept that every financial transaction affects at least two accounts in an organization's accounting system. This approach ensures that the accounting equation (Assets = Liabilities + Equity) remains balanced after each transaction. For instance, if a company makes a sale, it not only records an increase in revenue (which affects the equity) but also a corresponding increase in cash or accounts receivable (which affects assets). Thus, option A correctly captures the essence of double-entry accounting, emphasizing the necessity for each transaction to impact at least two accounts.

The other options do not accurately define double-entry accounting. Recording transactions in only one journal does not encompass the dual aspect of accounting necessary for maintaining balance. While it is true that assets and liabilities must balance, this statement alone does not describe the dual impact of transactions inherent in double-entry accounting. Similarly, the relationship between revenue and expenses is relevant to net income determination but does not reflect the core principle of dual account impact characteristic of double-entry systems.