Final answer:
The system where every transaction is recorded as two entries in accounting is known as double-entry bookkeeping. It employs the use of T-accounts to record debits and credits, ensuring the accounting equation remains balanced.
Step-by-step explanation:
In accounting, the system in which every transaction must be recorded as two entries is called double-entry bookkeeping. This method ensures that the accounting equation (Assets = Liabilities + Owner's Equity) always remains balanced. Each transaction affects at least two accounts and is recorded as a debit in one account and a credit in another.
A typical tool used in double-entry bookkeeping is the T-account, a balance sheet that has a two-column format. The T-shape is formed by a vertical line down the middle, separating the two columns under the headings "Assets" and "Liabilities". This visual aid helps in demonstrating the effects of transactions on each account.