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 a company uses a debit card to purchase supplies, which account is credited in the journal entry?

Accounts Payable

Cash

Sales Revenue

Supplies

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Verified step by step guidance

Understand the nature of the transaction: When a company uses a debit card to purchase supplies, it is paying for the supplies immediately using cash from its bank account.

Identify the accounts involved: The two accounts affected are 'Supplies' (an asset account) and 'Cash' (another asset account).

Determine the journal entry: Since supplies are being purchased, the 'Supplies' account will be debited to increase the asset. The 'Cash' account will be credited to decrease the asset, as cash is being used for the purchase.

Apply the accounting equation: Ensure that the transaction maintains the balance of the accounting equation (Assets = Liabilities + Equity). In this case, one asset (Supplies) increases while another asset (Cash) decreases, keeping the equation balanced.

Record the journal entry: Debit the 'Supplies' account and credit the 'Cash' account in the journal entry to reflect the purchase of supplies using a debit card.