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 action is performed to update account balances in the accounting records?

Preparing a trial balance

Calculating depreciation

Posting to the income statement

Recording journal entries

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Verified step by step guidance

Understand the concept of journal entries: Journal entries are the primary method used to record financial transactions in the accounting system. Each transaction is recorded in the journal with a debit and credit to the appropriate accounts.

Recognize the purpose of journal entries: Recording journal entries ensures that all financial transactions are accurately documented and reflected in the accounting records. This is the first step in updating account balances.

Learn the process of recording journal entries: For each transaction, identify the accounts affected, determine whether each account is debited or credited, and record the transaction in the journal using the double-entry accounting system.

Understand how journal entries impact account balances: Once journal entries are recorded, they are posted to the ledger accounts. This updates the balances of the accounts in the accounting records.

Differentiate journal entries from other actions: Preparing a trial balance, calculating depreciation, and posting to the income statement are important accounting tasks, but they do not directly update account balances. Recording journal entries is the correct action for this purpose.