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

Corinne receives a payment from a customer for a previous sale made on account. Which journal entry should she record?

Debit Cash; Credit Accounts Receivable

Debit Cash; Credit Sales Revenue

Debit Accounts Receivable; Credit Cash

Debit Sales Revenue; Credit Cash

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Verified step by step guidance

Understand the transaction: Corinne is receiving a payment from a customer for a previous sale made on account. This means the customer is paying off their outstanding balance, which was recorded as Accounts Receivable when the sale was made.

Identify the accounts involved: The payment increases Corinne's cash balance, so the Cash account will be debited. The Accounts Receivable account will be credited to reduce the outstanding balance owed by the customer.

Recall the accounting principle: Debits increase asset accounts (like Cash), and credits decrease asset accounts (like Accounts Receivable). This aligns with the nature of the transaction.

Construct the journal entry: Debit the Cash account to reflect the increase in cash received. Credit the Accounts Receivable account to show the reduction in the amount owed by the customer.

Verify the journal entry: Ensure the debit and credit amounts are equal, maintaining the balance in the accounting equation (Assets = Liabilities + Equity).