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 items is considered an explicit transaction in financial accounting?

Payment of rent to a landlord

Recognition of depreciation expense

Estimation of bad debt expense

Accrual of interest revenue

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Verified step by step guidance

Step 1: Understand the concept of explicit transactions in financial accounting. Explicit transactions are those that involve a clear, observable exchange of value between entities, such as cash payments or receipts.

Step 2: Analyze each option provided in the problem to determine whether it involves an explicit transaction. Explicit transactions typically involve physical or monetary exchanges.

Step 3: Evaluate 'Payment of rent to a landlord.' This involves a direct cash payment to the landlord, making it an explicit transaction.

Step 4: Evaluate 'Recognition of depreciation expense.' This is an accounting adjustment to allocate the cost of an asset over its useful life, which does not involve a direct exchange of value, so it is not an explicit transaction.

Step 5: Evaluate 'Estimation of bad debt expense' and 'Accrual of interest revenue.' Both are accounting estimates or adjustments that do not involve a direct exchange of value, so they are not explicit transactions.