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

Under what conditions will an account balance be a debit?

Only when the account is a liability account

When debits and credits are equal in the account

When the total debits exceed the total credits in the account

When the total credits exceed the total debits in the account

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Verified step by step guidance

Understand the concept of debit and credit: In accounting, debits and credits are used to record transactions. Debits increase asset and expense accounts, while credits increase liability, equity, and revenue accounts.

Analyze the account type: Determine whether the account in question is an asset, liability, equity, revenue, or expense account. This will help you understand how debits and credits affect the account balance.

Review the condition for a debit balance: A debit balance occurs when the total debits in an account exceed the total credits. This is typical for asset and expense accounts.

Compare the total debits and credits: To determine if an account has a debit balance, calculate the sum of all debit entries and compare it to the sum of all credit entries in the account.

Conclude based on the comparison: If the total debits are greater than the total credits, the account will have a debit balance. This condition applies regardless of the account type.