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

Anaya receives a bank statement showing a deposit of $1,000 into her business account. Which journal entry should she record to reflect this transaction?

Debit Cash $1,000; Credit Accounts Receivable $1,000

Debit Cash $1,000; Credit Revenue $1,000

Debit Accounts Payable $1,000; Credit Cash $1,000

Debit Revenue $1,000; Credit Cash $1,000

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Verified step by step guidance

Understand the nature of the transaction: Anaya has received a deposit of $1,000 into her business account. This means her cash balance has increased, and the source of this cash needs to be identified.

Determine the correct accounts to be affected: Since the deposit increases the business's cash, the 'Cash' account (an asset) must be debited. The credit side should reflect the source of the cash, which in this case is revenue earned by the business.

Apply the double-entry accounting principle: For every debit, there must be an equal credit. Debit the 'Cash' account to increase it, and credit the 'Revenue' account to record the income earned.

Write the journal entry: The journal entry should be as follows: Debit 'Cash' for $1,000 and Credit 'Revenue' for $1,000. This reflects the increase in cash and the recognition of revenue.

Verify the entry: Ensure that the total debits equal the total credits ($1,000 each) and that the accounts affected align with the nature of the transaction (cash received and revenue earned).