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 transactions is recorded with a debit to Cash and a credit to Notes Receivable?

Issuance of a note receivable to a customer

Borrowing cash by signing a new note payable

Payment of a note payable to a lender

Collection of a note receivable at maturity

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Verified step by step guidance

Step 1: Understand the nature of the transaction. A debit to Cash indicates an increase in the company's cash account, while a credit to Notes Receivable indicates a decrease in the company's asset account for notes receivable.

Step 2: Recall that Notes Receivable represents amounts owed to the company by customers or other parties, typically documented in a formal agreement. When the company collects cash at maturity, the note receivable is settled, reducing the Notes Receivable account.

Step 3: Analyze the transaction described in the problem. The collection of a note receivable at maturity involves receiving cash from the customer or debtor, which increases the Cash account (debit) and decreases the Notes Receivable account (credit).

Step 4: Compare the other options provided in the problem. Issuance of a note receivable to a customer would involve creating a new Notes Receivable account (debit) and possibly crediting another account like Sales Revenue. Borrowing cash by signing a new note payable would involve a debit to Cash and a credit to Notes Payable. Payment of a note payable to a lender would involve a debit to Notes Payable and a credit to Cash.

Step 5: Conclude that the correct transaction matching a debit to Cash and a credit to Notes Receivable is the collection of a note receivable at maturity, as this reflects the settlement of the note and receipt of cash.