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

An account will have a credit balance if the:

total credits exceed total debits

total debits exceed total credits

total debits equal total credits

account is an asset account

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Verified step by step guidance

Understand the basic accounting equation: Assets = Liabilities + Equity. This equation helps us determine the nature of accounts and their normal balances.

Recall the normal balance of different types of accounts: Asset accounts typically have a debit balance, while liability and equity accounts typically have a credit balance.

Analyze the relationship between debits and credits: A credit balance occurs when the total credits in an account exceed the total debits. This is the key condition for an account to have a credit balance.

Apply this concept to the options provided: Evaluate each option to determine which one aligns with the condition for a credit balance. For example, 'total credits exceed total debits' directly matches the definition of a credit balance.

Eliminate incorrect options: For instance, 'total debits exceed total credits' would result in a debit balance, not a credit balance. Similarly, 'total debits equal total credits' would result in a zero balance, and 'account is an asset account' is unrelated to the credit balance condition.