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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

What transaction is occurring if a company debits Cash and credits Notes Receivable?

The company is collecting cash from a customer to settle a note receivable.

The company is borrowing cash by signing a note payable.

The company is issuing a new note receivable to a customer.

The company is paying off a note payable with cash.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the accounts involved in the transaction. 'Cash' is an asset account, and a debit to Cash indicates an increase in the company's cash balance. 'Notes Receivable' is also an asset account, and a credit to Notes Receivable indicates a decrease in the company's receivable balance.

Step 2: Analyze the nature of Notes Receivable. Notes Receivable represents amounts owed to the company by customers or other parties, typically documented in a formal agreement. A credit to Notes Receivable suggests that the company is reducing the balance of this account.

Step 3: Consider the relationship between Cash and Notes Receivable. If the company is debiting Cash and crediting Notes Receivable, it implies that the company is receiving cash in exchange for reducing the amount owed to it under Notes Receivable.

Step 4: Interpret the transaction. The company is collecting cash from a customer to settle a note receivable. This means the customer is paying off their debt, and the company is recording the receipt of cash while removing the corresponding receivable from its books.

Step 5: Confirm the correct answer. Based on the analysis, the correct transaction is: 'The company is collecting cash from a customer to settle a note receivable.'