Final answer:
In every financial transaction, at least two accounts are involved due to the double-entry bookkeeping system.
Step-by-step explanation:
In every transaction in accounting, there must be at least two accounts involved, reflecting the two sides of the transaction. This corresponds to the fundamental principle known as double-entry bookkeeping, where each transaction affects at least two accounts in a way that maintains the accounting equation: Assets = Liabilities + Equity. An example to illustrate how money moves can be seen in banking transactions, such as when a transfer fee is charged to move a larger amount of money from one account to another.
Looking at the history of banking institutions and the movement of money, we see significant changes over time. In 2008, there were 7,085 banks. However, due to bank failures during the 2007-2009 financial crisis and subsequent mergers, by 2014 the number reduced to 5,571 banks in the United States. The changing banking landscape also saw an increase in the number of credit unions, with assets amounting to billions. The 'Transfer Your Money' initiative in 2009, driven by public dissatisfaction with big bank bailouts, further influenced these dynamics, leading to more people moving their money to credit unions. By 2020, the number of commercial banks had slimmed down to 4,374, with 627 savings institutions existing alongside.
Despite such changes, a small percentage of large banks continue to hold a significant portion of banking assets. As reported by the Dallas Federal Reserve, by 2013, the 12 largest banks controlled 69 percent of all banking assets.