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

Javier needs to record the month-end adjustment for accrued salaries of $2,000 that have not yet been paid. Which of the following journal entries should he make?

Debit Cash $2,000; Credit Salaries Expense $2,000

Debit Salaries Payable $2,000; Credit Salaries Expense $2,000

Debit Salaries Expense $2,000; Credit Salaries Payable $2,000

Debit Salaries Expense $2,000; Credit Cash $2,000

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Verified step by step guidance

Understand the concept of accrued salaries: Accrued salaries represent expenses that have been incurred but not yet paid. These are recorded as liabilities because the company owes this amount to employees.

Identify the correct accounts to use: Since the salaries have been incurred but not paid, the Salaries Expense account should be debited to recognize the expense, and the Salaries Payable account should be credited to record the liability.

Determine why Cash is not involved: Cash is not credited because no payment has been made yet. The adjustment is only to recognize the expense and liability, not to record a cash transaction.

Write the journal entry: The journal entry should be structured as follows: Debit Salaries Expense $2,000 (to increase expenses) and Credit Salaries Payable $2,000 (to increase liabilities).

Review the impact on financial statements: This adjustment increases expenses on the income statement and liabilities on the balance sheet, ensuring accurate financial reporting for the period.