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

Which of the following is the correct journal entry, if any, to record an adjusting entry for outstanding checks at the end of an accounting period?

No journal entry is required for outstanding checks.

Debit Cash; Credit Accounts Payable

Debit Outstanding Checks; Credit Cash

Debit Bank Service Charges Expense; Credit Cash

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Verified step by step guidance

Understand the concept of outstanding checks: Outstanding checks are checks issued by a company that have not yet been cleared or processed by the bank. These checks are already recorded in the company's books but are not yet reflected in the bank statement.

Recognize that outstanding checks are part of the bank reconciliation process: They are used to reconcile the difference between the company's cash balance and the bank statement balance. No adjusting journal entry is required because the checks have already been recorded in the company's accounting system.

Review the options provided: The options suggest recording a journal entry, but none of them are appropriate for outstanding checks. Outstanding checks do not require a journal entry because they are not an error or a new transaction; they are simply timing differences.

Understand why no journal entry is required: Adjusting entries are typically made to correct errors, record accrued expenses, or recognize revenue. Outstanding checks do not fall into these categories, as they are already accounted for in the company's books.

Conclude that the correct answer is 'No journal entry is required for outstanding checks': This is because outstanding checks are part of the reconciliation process and do not impact the company's financial statements directly.