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 items listed on a ledger typically represent credits?

Increase in expense accounts

Increase in asset accounts

Decrease in liability accounts

Increase in revenue accounts

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Verified step by step guidance

Understand the concept of debits and credits in accounting: Debits and credits are the two sides of every transaction in double-entry accounting. Debits typically increase asset and expense accounts, while credits typically increase liability, equity, and revenue accounts.

Analyze the options provided: Each option represents a type of account or transaction. Determine whether the action described (increase or decrease) aligns with the behavior of credits.

Option 1: 'Increase in expense accounts' - Expense accounts increase with debits, not credits. Therefore, this option does not represent credits.

Option 2: 'Increase in asset accounts' - Asset accounts increase with debits, not credits. Therefore, this option does not represent credits.

Option 3: 'Decrease in liability accounts' - Liability accounts decrease with debits, not credits. Therefore, this option does not represent credits. The correct answer is 'Increase in revenue accounts,' as revenue accounts increase with credits.