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

Using computers to post information from journals to the ledger instantaneously has the benefit of:

removing the requirement for double-entry accounting

reducing the likelihood of posting errors

increasing the time required to update financial records

eliminating the need for source documents

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Verified step by step guidance

Understand the role of computers in the accounting process: Computers are used to automate tasks such as posting information from journals to ledgers, which reduces manual effort and increases accuracy.

Recall the purpose of double-entry accounting: Double-entry accounting ensures that every transaction affects at least two accounts, maintaining the accounting equation (Assets = Liabilities + Equity). Computers do not eliminate this requirement; they simply automate the process.

Consider the impact on posting errors: By automating the transfer of data from journals to ledgers, computers reduce the likelihood of human errors, such as transposition errors or omissions, during the posting process.

Evaluate the time required to update records: Computers process data much faster than manual methods, so they decrease, rather than increase, the time required to update financial records.

Assess the need for source documents: Source documents (e.g., invoices, receipts) are still required as evidence of transactions, even when using computers. Computers do not eliminate this need; they simply store and process the data more efficiently.