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

1. Introduction to Accounting

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

In the context of the fundamental accounting equation, the left side of an account is used to record which of the following?

Debits

Assets only

Liabilities only

Credits

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Verified step by step guidance

Understand the fundamental accounting equation: Assets = Liabilities + Equity. This equation forms the basis of double-entry accounting.

Recognize that in accounting, each account has two sides: the debit side (left) and the credit side (right). Debits and credits are used to record changes in accounts.

Learn that debits increase asset accounts and expense accounts, while credits decrease them. Conversely, credits increase liability accounts, equity accounts, and revenue accounts, while debits decrease them.

Focus on the question: The left side of an account is used to record debits. Debits are associated with increases in assets and expenses, and decreases in liabilities and equity.

Conclude that the correct answer is 'Debits' and that debits are primarily used to record changes in asset accounts, not liabilities or credits.