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 transactions would appear on the debit side of the Accounts Payable T-account?

Payment to a supplier for a previous credit purchase

Accruing additional payables at year-end

Purchasing inventory on credit

Recording a purchase return to a supplier

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Verified step by step guidance

Understand the structure of a T-account: A T-account is a visual representation of an account in the ledger. The left side is the debit side, and the right side is the credit side.

Recall the nature of Accounts Payable: Accounts Payable is a liability account. It increases with credit entries (when a company owes more) and decreases with debit entries (when a company pays off its liabilities).

Analyze the transaction 'Payment to a supplier for a previous credit purchase': When a company pays a supplier for a previous credit purchase, it reduces its liability. This reduction is recorded as a debit in the Accounts Payable T-account.

Evaluate the other transactions: 'Accruing additional payables at year-end' increases liabilities, so it would appear on the credit side. 'Purchasing inventory on credit' also increases liabilities, appearing on the credit side. 'Recording a purchase return to a supplier' decreases liabilities, appearing on the debit side.

Conclude that transactions reducing Accounts Payable, such as payments to suppliers or purchase returns, appear on the debit side of the Accounts Payable T-account.