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 journal entries correctly records the purchase of office supplies for cash?

Debit Office Supplies; Credit Accounts Receivable

Debit Office Supplies; Credit Cash

Debit Cash; Credit Office Supplies

Debit Accounts Payable; Credit Office Supplies

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Verified step by step guidance

Understand the nature of the transaction: The purchase of office supplies for cash means that office supplies are being acquired, and cash is being used to pay for them. This affects the Office Supplies account and the Cash account.

Identify the accounts involved: The Office Supplies account represents an asset, and the Cash account also represents an asset. When office supplies are purchased, the Office Supplies account increases, and the Cash account decreases.

Determine the type of account changes: An increase in an asset account (Office Supplies) is recorded as a debit, while a decrease in an asset account (Cash) is recorded as a credit.

Apply the rules of double-entry accounting: For every transaction, debits must equal credits. In this case, you would debit the Office Supplies account to reflect the increase in supplies and credit the Cash account to reflect the decrease in cash.

Review the journal entry options: The correct journal entry is 'Debit Office Supplies; Credit Cash,' as it accurately reflects the increase in office supplies and the decrease in cash due to the purchase.