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 statements about debits is false?

Debits decrease liability accounts.

Debits increase asset accounts.

Debits always increase all types of accounts.

Debits increase expense accounts.

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Verified step by step guidance

Understand the concept of debits and credits: In accounting, debits and credits are used to record transactions in the double-entry system. Debits are entries made on the left side of an account, while credits are entries made on the right side.

Review the impact of debits on different types of accounts: Debits increase asset and expense accounts, but they decrease liability, equity, and revenue accounts. This is a fundamental rule in accounting.

Analyze each statement provided in the problem: For example, 'Debits decrease liability accounts' is true because debits reduce liabilities. Similarly, 'Debits increase asset accounts' and 'Debits increase expense accounts' are also true based on the rules of debits.

Evaluate the statement 'Debits always increase all types of accounts': This statement is false because debits do not increase all types of accounts. They decrease liability, equity, and revenue accounts, which contradicts the claim.

Conclude that the false statement is 'Debits always increase all types of accounts' based on the analysis of how debits affect different account types.