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

In which of the following types of accounts are decreases recorded by debits?

Asset accounts

Liability accounts

Expense accounts

Dividend accounts

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Verified step by step guidance

Understand the concept of debits and credits: In accounting, debits and credits are used to record changes in accounts. Debits typically increase asset and expense accounts, while they decrease liability, equity, and revenue accounts.

Analyze the question: The problem asks which type of account records decreases with debits. This means we are looking for accounts where a debit entry reduces the account balance.

Review the account types: Asset accounts increase with debits and decrease with credits. Liability accounts decrease with debits and increase with credits. Expense accounts increase with debits and decrease with credits. Dividend accounts increase with debits and decrease with credits.

Focus on liability accounts: Liability accounts are the only type of account listed where decreases are recorded by debits. This is because liabilities represent obligations, and reducing them requires a debit entry.

Conclude the reasoning: Based on the analysis, liability accounts are the correct answer because decreases in liabilities are recorded by debits.