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

With double-entry accounting, each transaction requires:

A credit entry only

Only a single entry, either a debit or a credit

A debit entry only

At least one debit and one credit entry of equal amounts

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Verified step by step guidance

Understand the concept of double-entry accounting: Double-entry accounting is a system where every transaction affects at least two accounts, ensuring the accounting equation (Assets = Liabilities + Equity) remains balanced.

Learn the rule of debits and credits: In double-entry accounting, debits and credits are used to record transactions. Debits increase asset and expense accounts, while credits increase liability, equity, and revenue accounts.

Recognize the requirement for balance: Each transaction must have at least one debit and one credit entry, and the total debits must equal the total credits to maintain the balance in the accounting equation.

Apply the principle to transactions: For example, if a company receives cash (an asset), it would debit the Cash account and credit another account, such as Revenue or Accounts Receivable, depending on the nature of the transaction.

Review examples to reinforce understanding: Practice with sample transactions to see how debits and credits are applied in real-world scenarios, ensuring the total debits and credits are equal for each transaction.