Question

BOP accounts are recorded in a double-entry bookkeeping method, with each transaction having debit and credit sides. What method is used to record BOP accounts?

1) Single-entry bookkeeping
2) Triple-entry bookkeeping
3) Cash basis accounting
4) Accrual basis accounting

Answer 1

BOP accounts are recorded using double-entry bookkeeping, with each transaction entered as both a debit and a credit in separate accounts to maintain balance. The options provided in the question do not accurately describe this method.

Step-by-step explanation:

The method used to record Balance of Payments (BOP) accounts is double-entry bookkeeping. In this accounting method, each transaction is entered twice, once as a debit to one account and once as a credit to another, ensuring that the accounting equation balances. This system is used to maintain accuracy and verify that total debits equal total credits, which is crucial for financial statements to reflect a company's true financial position.

The correct answer to the question is not listed in the options provided since BOP transactions are recorded using double-entry bookkeeping, not single-entry, triple-entry, cash basis, or accrual basis accounting. These options represent different accounting methodologies that do not specifically relate to the way BOP transactions are recorded.