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

When recording a transaction in the general journal, after identifying the accounts involved, what is the next step?

Post the transaction directly to the ledger

Close the temporary accounts

Prepare the trial balance

Determine which accounts to debit and which to credit

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Verified step by step guidance

Understand the purpose of the general journal: It is used to record transactions in chronological order before posting them to the ledger accounts.

Identify the accounts involved in the transaction: Determine which accounts are affected by the transaction based on the nature of the event (e.g., cash, accounts receivable, revenue, expenses).

Determine the type of accounts: Classify the accounts as assets, liabilities, equity, revenue, or expenses to understand their behavior in terms of debits and credits.

Apply the rules of debits and credits: Use the accounting equation and the rules for debits and credits to decide which account to debit and which account to credit. For example, assets increase with debits and decrease with credits, while liabilities and equity increase with credits and decrease with debits.

Record the transaction in the general journal: Write the date, the accounts to be debited and credited, the amounts, and a brief description of the transaction in the journal entry format.