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 best describes the process of posting journal entries to ledger accounts?

Preparing the trial balance from the ledger accounts.

Transferring each debit and credit from the journal to the corresponding ledger account.

Summarizing financial statements for external reporting.

Recording transactions in the journal for the first time.

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Verified step by step guidance

Understand the concept of posting: Posting is the process of transferring information from the journal (where transactions are initially recorded) to the ledger accounts (which organize transactions by account).

Identify the purpose of the ledger: The ledger is used to summarize all transactions for each account, showing the cumulative effect of debits and credits over time.

Recognize the mechanics of posting: For each journal entry, the debit amount is posted to the corresponding ledger account on the debit side, and the credit amount is posted to the corresponding ledger account on the credit side.

Distinguish posting from other processes: Posting is not the same as preparing a trial balance, summarizing financial statements, or recording transactions in the journal. It specifically involves transferring amounts from the journal to the ledger.

Relate the process to the accounting cycle: Posting is a critical step in the accounting cycle, as it ensures that all transactions are accurately reflected in the ledger accounts, which are later used to prepare the trial balance and financial statements.