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

Which of the following selections includes all of the required information that must be entered in a journal entry?

Accounts affected and amounts credited only

Date and a brief explanation only

Date, accounts affected, amounts debited and credited, and a brief explanation

Only the accounts affected and the amounts debited

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Verified step by step guidance

Understand the purpose of a journal entry: A journal entry is used to record financial transactions in the accounting system. It must include all necessary details to ensure accuracy and compliance with accounting principles.

Identify the required components of a journal entry: A complete journal entry must include the date of the transaction, the accounts affected, the amounts debited and credited, and a brief explanation of the transaction.

Clarify the role of debits and credits: Debits and credits are used to record changes in accounts. Debits typically increase asset or expense accounts, while credits typically increase liability, equity, or revenue accounts. Both must balance to maintain the accounting equation.

Ensure the inclusion of a brief explanation: The explanation provides context for the transaction, helping users of financial statements understand the nature of the entry.

Review the options provided in the problem: Compare each option to the required components of a journal entry. The correct answer is the one that includes all necessary elements: date, accounts affected, amounts debited and credited, and a brief explanation.