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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

When recording an expense in a financial ledger, it is entered as a _____.

savings

balance

credit

debit

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Verified step by step guidance

Understand the basic accounting principle: Expenses are recorded as debits because they decrease equity and increase the total expenses in the financial ledger.

Recall the structure of a financial ledger: It consists of two sides—debits on the left and credits on the right.

Recognize that expenses reduce the net income, which is part of equity. In accounting, reductions in equity are recorded as debits.

When recording an expense, identify the account affected (e.g., Rent Expense, Utilities Expense) and enter the amount on the debit side of the ledger.

Ensure that the corresponding credit entry is made to the appropriate account, such as Cash or Accounts Payable, to maintain the balance in the accounting equation: Assets = Liabilities + Equity.