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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

When a business receives cash on account, which two accounts are affected in the journal entry?

Cash and Revenue

Accounts Payable and Cash

Accounts Receivable and Revenue

Cash and Accounts Receivable

Previous problemNext problem

Verified step by step guidance

Understand the concept of 'cash on account': This occurs when a business receives cash from a customer who previously owed money (accounts receivable). It is a payment against an outstanding balance.

Identify the two accounts involved: The cash account increases because the business is receiving money, and the accounts receivable account decreases because the customer is paying off their debt.

Determine the type of accounts: Cash is an asset account, and accounts receivable is also an asset account. Receiving cash increases one asset (Cash) while decreasing another asset (Accounts Receivable).

Formulate the journal entry: Debit the Cash account to reflect the increase in cash, and credit the Accounts Receivable account to reflect the decrease in the amount owed by the customer.

Ensure the accounting equation remains balanced: The total assets remain unchanged because the increase in Cash is offset by the decrease in Accounts Receivable.