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

A company had the following cash transactions during the month: (1) Received $5,000 from customers, (2) Paid $2,000 for rent, and (3) Received $1,500 from a bank loan. If the beginning cash balance was $3,000, what is the ending balance in the cash T-account after posting these transactions?

$7,500

$4,500

$6,000

$5,500

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the structure of a T-account. A T-account is a visual representation of an account, with debits on the left side and credits on the right side. For cash transactions, increases in cash are recorded as debits, and decreases are recorded as credits.

Step 2: Start with the beginning cash balance. The problem states that the beginning cash balance is $3,000. This will be the starting point in the cash T-account.

Step 3: Record the cash inflows (debits). Add the amounts received: $5,000 from customers and $1,500 from the bank loan. These amounts increase the cash balance and should be recorded as debits in the T-account.

Step 4: Record the cash outflows (credits). Subtract the amount paid for rent, which is $2,000. This decreases the cash balance and should be recorded as a credit in the T-account.

Step 5: Calculate the ending balance. To find the ending balance, sum the debits (cash inflows) and subtract the credits (cash outflows) from the beginning balance. The formula is: $ \text{Ending Balance} = \text{Beginning Balance} + \text{Debits} - \text{Credits} $.