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

What is the first step in analyzing the effect of transactions when preparing journal entries?

Record the transaction in the general ledger

Determine the amount to be debited and credited

Identify the accounts affected by the transaction

Prepare the trial balance

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Verified step by step guidance

Understand that journal entries are used to record the financial effects of transactions in accounting.

The first step in analyzing the effect of transactions is to identify the accounts affected by the transaction. This involves determining which accounts (e.g., assets, liabilities, equity, revenue, or expenses) are impacted.

Once the accounts are identified, classify them as either increasing or decreasing based on the nature of the transaction.

Determine the amount to be debited and credited for each account, ensuring that the accounting equation (Assets = Liabilities + Equity) remains balanced.

Record the transaction in the general ledger by preparing the journal entry, specifying the debit and credit amounts for the affected accounts.