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Set 5: Central Ideas (Advanced)

Explanation

Answer: A

PASSAGE

The following text describes 'Double-Entry Bookkeeping'. Double-entry bookkeeping is a system of accounting where every entry to an account requires a corresponding and opposite entry to a different account. The double-entry has two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-hand side is credit. The fundamental equation is: Assets = Liabilities + Equity. This system ensures that the books always balance, making errors easier to detect and providing a clear picture of financial health.

What is the primary advantage of the double-entry system mention in the text?

A. It allows companies to avoid paying taxes✓ Correct
B. It ensures the books balance, aiding error detection
C. It requires less work than single-entry systems
D. It was invented by Leonardo da Vinci

Detailed Explanation

Choice B is correct. The text states: 'This system ensures that the books always balance, making errors easier to detect.'

Key Evidence:

• "ensures that the books always balance"

• "making errors easier to detect"

Why others are wrong: A (Not mentioned), C (Opposite (usually more work but more accurate)), D (Not mentioned).

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