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 best describes the information for each transaction recorded in a journal?

Only the total amount of the transaction.

The names of the customers involved.

The balance of each account after the transaction.

The accounts affected, amounts debited and credited, and a brief explanation.

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Verified step by step guidance

Understand the purpose of a journal in accounting: A journal is a chronological record of all transactions, providing detailed information about each transaction.

Identify the key components recorded in a journal entry: These include the accounts affected, the amounts debited and credited, and a brief explanation of the transaction.

Clarify why other options are incorrect: For example, recording only the total amount of the transaction or the names of customers involved does not provide sufficient detail for proper accounting. Similarly, the balance of each account after the transaction is not typically recorded in the journal but in the ledger.

Recognize the importance of debits and credits: Journals use the double-entry accounting system, where every transaction affects at least two accounts, with one account debited and another credited.

Conclude that the correct description of journal information is: The accounts affected, amounts debited and credited, and a brief explanation of the transaction.