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

A credit is used to record an increase in which of the following types of accounts?

Expense accounts

Dividend accounts

Liability accounts

Asset accounts

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Verified step by step guidance

Understand the concept of debits and credits in accounting: Debits and credits are the fundamental building blocks of double-entry accounting. A debit increases asset and expense accounts, while a credit increases liability, equity, and revenue accounts.

Identify the account types mentioned in the problem: Expense accounts, Dividend accounts, Liability accounts, and Asset accounts.

Recall the rule for liability accounts: A credit is used to record an increase in liability accounts because liabilities represent obligations owed by the business, and credits increase these obligations.

Compare the other account types: Expense accounts and Dividend accounts are increased by debits, not credits. Asset accounts are also increased by debits, not credits.

Conclude that the correct account type for which a credit records an increase is Liability accounts, as per the rules of double-entry accounting.