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

Given the selected T-accounts of Moore Company for the just completed year, which of the following statements correctly describes the effect of a debit entry on an asset account?

A debit increases an asset account.

A debit decreases an asset account.

A debit has no effect on an asset account.

A debit always decreases both asset and liability accounts.

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Verified step by step guidance

Understand the nature of T-accounts: T-accounts are a visual representation of accounts in the ledger, where the left side represents debits and the right side represents credits.

Recall the accounting equation: Assets = Liabilities + Equity. In this equation, debits and credits affect accounts differently depending on their type.

Focus on asset accounts: For asset accounts, a debit entry increases the balance of the account, while a credit entry decreases it. This is because assets are on the left side of the accounting equation, and debits are associated with increases on this side.

Compare the options provided: Analyze each statement in the problem and determine which aligns with the rule that a debit increases an asset account.

Conclude the correct statement: Based on the analysis, identify the statement that correctly describes the effect of a debit entry on an asset account.