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

Expenses follow the same debit and credit rules as which of the following accounts?

Owner's Equity

Liabilities

Assets

Revenues

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Verified step by step guidance

Understand the nature of expenses: Expenses are costs incurred by a business in the process of earning revenue. They reduce the owner's equity because they decrease the net income of the business.

Recall the debit and credit rules: Assets increase with a debit and decrease with a credit. Similarly, expenses increase with a debit and decrease with a credit, as they are treated as reductions to equity.

Compare expenses to the other account types: Liabilities and revenues increase with a credit and decrease with a debit, which is the opposite of how expenses behave. Owner's equity also increases with a credit, so it does not follow the same rules as expenses.

Identify the correct match: Since expenses increase with a debit and decrease with a credit, they follow the same rules as assets, which also increase with a debit and decrease with a credit.

Conclude the reasoning: The correct answer is 'Assets' because both expenses and assets share the same debit and credit behavior in accounting.