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

An account is said to have a debit balance if:

the total credits exceed the total debits in the account.

the account has only credit entries.

the account has equal debit and credit entries.

the total debits exceed the total credits in the account.

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Verified step by step guidance

Understand the concept of a debit balance: A debit balance occurs when the total debits in an account exceed the total credits. This is typical for asset, expense, and dividend accounts in financial accounting.

Review the structure of accounts: In double-entry accounting, every transaction affects at least two accounts, with one account debited and the other credited. Debit entries increase asset and expense accounts, while credit entries increase liability, equity, and revenue accounts.

Analyze the options provided: Evaluate each statement to determine which aligns with the definition of a debit balance. For example, 'the total credits exceed the total debits' would result in a credit balance, not a debit balance.

Focus on the correct answer: The correct answer is 'the total debits exceed the total credits in the account,' as this matches the definition of a debit balance.

Apply this understanding to practical scenarios: Practice identifying debit balances in real-world examples, such as reviewing a trial balance or analyzing individual ledger accounts to reinforce the concept.