Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

When an error in journalizing is discovered after posting, which of the following is the correct procedure to correct the error?

Make a correcting entry in the journal to fix the error.

Erase the original entry and record the correct one.

Reverse the entire set of journal entries for the period.

Ignore the error if it is not material.

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Verified step by step guidance

Understand the nature of the error: Determine what the error is and how it impacts the accounts involved. Errors can include incorrect amounts, wrong accounts, or improper classification.

Identify the accounts affected: Analyze the original journal entry to identify which accounts were debited and credited incorrectly.

Prepare a correcting journal entry: Create a new journal entry that reverses the incorrect portion of the original entry and records the correct information. For example, if the wrong account was credited, debit the incorrect account and credit the correct account.

Post the correcting entry: Post the correcting journal entry to the ledger accounts to ensure the financial records are accurate.

Verify the correction: Review the updated ledger and trial balance to confirm that the error has been properly corrected and the accounts are now accurate.