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

In the context of journal entries, when an employer pays salaries to employees, which of the following accounts is debited?

Service Revenue

Salaries Payable

Salaries Expense

Cash

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Verified step by step guidance

Understand the nature of the transaction: When an employer pays salaries to employees, it represents an expense incurred by the business for the services provided by the employees. Expenses are recorded as debits in accounting.

Identify the correct account to debit: Salaries Expense is the account that reflects the cost of salaries paid to employees. This account is debited to increase the expense, as expenses reduce the equity of the business.

Determine the account to credit: Since the payment is made in cash, the Cash account is credited to reflect the reduction in the company's cash balance.

Write the journal entry: The journal entry for this transaction would involve debiting the Salaries Expense account and crediting the Cash account. This ensures that the accounting equation remains balanced.

Review the options provided: Among the options listed (Service Revenue, Salaries Payable, Salaries Expense, Cash), Salaries Expense is the correct account to debit because it represents the expense incurred for paying salaries.