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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

When recording a bill received from a supplier, which account is typically credited in the journal entry?

Sales Revenue

Cash

Inventory

Accounts Payable

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Verified step by step guidance

Understand the nature of the transaction: A bill received from a supplier indicates that the company has incurred an obligation to pay for goods or services received. This creates a liability.

Identify the accounts involved: The accounts typically involved in this transaction are the expense or asset account (depending on what the bill is for) and the liability account, Accounts Payable.

Determine the journal entry structure: In double-entry accounting, every transaction affects at least two accounts. One account is debited, and the other is credited.

Decide which account is debited: The account that represents the expense or asset (e.g., Inventory, if the bill is for purchased goods) is debited to reflect the increase in expenses or assets.

Decide which account is credited: Accounts Payable is credited to record the liability, as the company now owes money to the supplier for the goods or services received.