A journal entry containing more than one debit or more than one credit is referred to as what?

A journal entry that includes more than one debit or more than one credit is referred to as a compound entry. This type of entry is essential in accounting because it allows for multiple accounts to be updated simultaneously, reflecting the effects of a particular transaction fully. In contrast, a simple journal entry typically includes one debit and one credit, impacting only two accounts.

Understanding compound entries is crucial for complex transactions that involve multiple aspects, such as the purchase of inventory that is partially financed through a loan and partially paid in cash. The compound entry ensures that all affected accounts are recorded accurately, which is vital for maintaining up-to-date financial records.

The other options represent different concepts: T-accounts are visual aids used to represent accounts in a structured format, double entry refers to the accounting principle that requires every transaction to be recorded in at least two accounts, and a transaction is any event that affects the financial position of a company but does not specifically define the nature of the journal entry.