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

Your bank account balance is $-\$20.85$. You deposit \$15.50. What is your new balance?

$-\$5.35$

$-\$35.35$

\$36.35

\$5.35

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Verified step by step guidance

Step 1: Understand the problem. The initial bank account balance is negative, indicating an overdraft of -$20.85. A deposit of $15.50 is made, which will reduce the overdraft amount.

Step 2: Represent the problem mathematically. The new balance can be calculated by adding the deposit amount to the current balance:

New Balance = (- 20.85) + 15.50

Step 3: Perform the addition. Since the initial balance is negative, adding a positive number (the deposit) will reduce the magnitude of the negative balance. This is equivalent to subtracting the deposit amount from the absolute value of the negative balance.

Step 4: Determine the sign of the result. If the deposit amount is less than the absolute value of the negative balance, the result will still be negative. If the deposit amount is greater, the result will be positive.

Step 5: Compare the calculated new balance to the provided answer choices (-$5.35, -$35.35, $36.35, $5.35) to identify the correct answer.