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 transactions increases total assets?

Paying off a supplier for inventory previously purchased on credit

Recording depreciation expense for the period

Declaring and paying a cash dividend to shareholders

Receiving cash from a customer for services performed

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Verified step by step guidance

Step 1: Understand the concept of total assets. Total assets represent the resources owned by a company that have economic value, such as cash, accounts receivable, inventory, and property, plant, and equipment.

Step 2: Analyze the first transaction: Paying off a supplier for inventory previously purchased on credit. This reduces liabilities (accounts payable) and cash (an asset), but does not increase total assets.

Step 3: Analyze the second transaction: Recording depreciation expense for the period. Depreciation reduces the value of fixed assets and increases expenses, which decreases net income and equity, but does not increase total assets.

Step 4: Analyze the third transaction: Declaring and paying a cash dividend to shareholders. This reduces cash (an asset) and retained earnings (equity), but does not increase total assets.

Step 5: Analyze the fourth transaction: Receiving cash from a customer for services performed. This increases cash (an asset) and decreases accounts receivable (another asset), but the net effect is an increase in total assets because cash is received without reducing other assets.