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

If Sales Revenue is credited in a journal entry, which of the following accounts would most likely be debited?

Inventory

Retained Earnings

Accounts Payable

Cash

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Verified step by step guidance

Understand the nature of the transaction: When Sales Revenue is credited, it indicates that the company has earned revenue from selling goods or services. This credit entry increases the revenue account.

Identify the corresponding debit account: In double-entry accounting, every credit entry must have a corresponding debit entry. Since the problem specifies that Cash is the correct answer, it implies that the company received cash for the sale.

Analyze the options provided: Inventory would be debited if goods were removed from stock, but this is not the case here. Retained Earnings is not directly affected by individual transactions, and Accounts Payable is a liability account, which is unrelated to cash received from sales.

Confirm the correct account: Cash is debited because it represents an increase in the company's cash balance due to the sale. The journal entry would be: Debit Cash and Credit Sales Revenue.

Summarize the journal entry: The journal entry for this transaction is structured as follows: Debit Cash (to record the inflow of cash) and Credit Sales Revenue (to record the earned revenue). This ensures the accounting equation remains balanced.