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

Which of the following statements about debits and credits in journal entries is correct?

Debiting a liability account increases its balance.

Debiting an asset account increases its balance.

Crediting a revenue account decreases its balance.

Crediting an expense account increases its balance.

Previous problemNext problem

Verified step by step guidance

Understand the basic rules of debits and credits: In accounting, debits and credits are used to record transactions in the journal. Debits are recorded on the left side of an account, and credits are recorded on the right side. Each type of account (assets, liabilities, equity, revenue, and expenses) behaves differently when debited or credited.

Analyze the behavior of asset accounts: Asset accounts increase when debited and decrease when credited. This is because assets represent resources owned by the business, and adding to them (debiting) increases their value.

Analyze the behavior of liability accounts: Liability accounts increase when credited and decrease when debited. This is because liabilities represent obligations, and adding to them (crediting) increases the amount owed.

Analyze the behavior of revenue accounts: Revenue accounts increase when credited and decrease when debited. This is because revenue represents income earned by the business, and adding to it (crediting) increases the total revenue.

Analyze the behavior of expense accounts: Expense accounts increase when debited and decrease when credited. This is because expenses represent costs incurred by the business, and adding to them (debiting) increases the total expenses.