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

2. Which of the following best describes the process of recording transactions in a journal?

Summarizing account balances at the end of the period.

Posting transactions directly to the ledger without initial recording.

Entering each transaction as a debit and a credit in chronological order.

Preparing financial statements from the trial balance.

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Verified step by step guidance

Understand the purpose of a journal: A journal is the book of original entry where transactions are recorded in chronological order before being posted to the ledger.

Recognize the double-entry system: Each transaction is recorded as a debit and a credit to ensure the accounting equation (Assets = Liabilities + Equity) remains balanced.

Identify the process: Transactions are entered into the journal with details such as the date, accounts affected, amounts, and a brief description of the transaction.

Clarify the distinction: Recording transactions in a journal is different from summarizing account balances, posting directly to the ledger, or preparing financial statements. These are separate steps in the accounting cycle.

Conclude the correct description: The process of recording transactions in a journal involves entering each transaction as a debit and a credit in chronological order.