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

In the context of journal entries, the debit is the amount you record on the left side of an account. What is the credit?

The total of all debits in a period

The amount recorded on the right side of an account

The sum of assets and liabilities

The amount recorded on the left side of an account

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Verified step by step guidance

Understand the concept of journal entries: In accounting, journal entries are used to record transactions in the books of accounts. Each transaction affects at least two accounts and follows the double-entry accounting system.

Learn the distinction between debit and credit: Debit refers to the amount recorded on the left side of an account, while credit refers to the amount recorded on the right side of an account.

Recognize the relationship between debits and credits: For every transaction, the total debits must equal the total credits to maintain the balance in the accounting equation.

Identify the correct answer: Based on the options provided, the correct definition of credit is 'The amount recorded on the right side of an account.'

Apply this understanding to journal entries: When recording transactions, ensure that debits and credits are properly assigned to the respective accounts to reflect the financial activity accurately.