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 the context of journal entries and the accounting equation, which formula correctly calculates the ending balance of an account in cell C25 if C25 represents the balance after recording all debits and credits for the period?

Beginning Balance + Total Debits - Total Credits

Beginning Balance - Total Debits + Total Credits

Total Debits + Total Credits

Beginning Balance + Total Credits - Total Debits

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Verified step by step guidance

Understand the accounting equation: The accounting equation is Assets = Liabilities + Equity. Journal entries affect this equation by recording debits and credits, which impact account balances.

Identify the components of the formula: The ending balance of an account is determined by starting with the Beginning Balance, then adding Total Debits (increases to the account), and subtracting Total Credits (decreases to the account).

Analyze the options provided: Compare each formula option to the logical flow of how debits and credits affect the account balance. For example, adding debits increases the balance, while subtracting credits decreases it.

Select the correct formula: The correct formula is 'Beginning Balance + Total Debits - Total Credits' because it accurately reflects the impact of debits and credits on the account balance.

Apply the formula to cell C25: To calculate the ending balance in cell C25, use the formula 'Beginning Balance + Total Debits - Total Credits' and ensure all values are correctly entered into the respective cells.