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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following statements about a journal in accounting is correct?

Journal entries do not require equal debits and credits.

A journal is a chronological record of all business transactions before they are posted to ledger accounts.

A journal is used to prepare the trial balance directly without posting to the ledger.

A journal only records transactions that affect cash accounts.

Previous problemNext problem

Verified step by step guidance

Understand the purpose of a journal in accounting: A journal is a chronological record of all business transactions, capturing the details of each transaction before they are posted to ledger accounts.

Review the principle of double-entry accounting: Journal entries must always have equal debits and credits to maintain the accounting equation (Assets = Liabilities + Equity). This ensures accuracy and balance in financial records.

Clarify the relationship between the journal and the ledger: Transactions recorded in the journal are later posted to the ledger accounts, which are used to prepare the trial balance. The journal itself is not used directly to prepare the trial balance.

Identify the scope of transactions recorded in the journal: A journal records all types of transactions, not just those affecting cash accounts. It includes transactions related to assets, liabilities, equity, revenue, and expenses.

Evaluate the given statements based on the above clarifications: The correct statement is 'A journal is a chronological record of all business transactions before they are posted to ledger accounts,' as it accurately describes the function of a journal in accounting.