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

Choose the statement below that correctly explains a general journal.

A general journal only records cash transactions and excludes credit transactions.

A general journal is used exclusively to summarize account balances at the end of the period.

A general journal is a chronological record of all business transactions, showing the accounts debited and credited for each entry.

A general journal contains only adjusting entries made at year-end.

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Verified step by step guidance

Understand the purpose of a general journal: A general journal is a primary book of entry where all business transactions are recorded in chronological order. It includes both cash and credit transactions, as well as adjusting entries when necessary.

Analyze the first option: 'A general journal only records cash transactions and excludes credit transactions.' This is incorrect because a general journal records all types of transactions, including both cash and credit.

Analyze the second option: 'A general journal is used exclusively to summarize account balances at the end of the period.' This is incorrect because summarizing account balances is the role of a trial balance or financial statements, not the general journal.

Analyze the third option: 'A general journal is a chronological record of all business transactions, showing the accounts debited and credited for each entry.' This is correct because it accurately describes the function of a general journal.

Analyze the fourth option: 'A general journal contains only adjusting entries made at year-end.' This is incorrect because a general journal records all types of transactions, not just adjusting entries.