ACCOUNTING CHAPTER 2USING “T” ACCOUNTS

Mr. Khatcheressian 09/17/2013

WELCOME!!!!

In Chapter One, transactions that affect owner’s equity on the accounting

equation were analyzed.

In today’s lesson, the relationship of a “T” account to the accounting equation

will be shown.

Preview the accounting terms and definitions introduced in this lesson: T

account, debit, credit and normal balance.

OBJECTIVES

Students will define accounting terms related to analyzing transactions into debit and credit parts

Identify accounting practices related to analyzing transactions into debit and credit parts.

Bank  

Debits (dr)

Credits (cr)

   

   

   

   

AGENDA

ObjectivesDirect Instruction Chapter 2

Aplia PracticeComplete Web-Site Assignments

Closure

ACCOUNTING EQUATION AND T ACCOUNT

Accounting Equation: an equation showing the relationship among assets, liabilities, and owner’s equity

T ACCOUNT

The process of using debits and credits creates a ledger format that resembles the letter "T". The term "T-account" is accounting jargon for a "ledger account" and is often used when discussing bookkeeping.

The left side (column) of the "T" for Debit transactions and the right side (column) of the "T" for Credit transactions.

T ACCOUNT

The T account is the foundation of transaction analysis

Debits and Credit will now be introduced Debits and Credits are neither Good or Bad. Debit means left and credit means rightBank  

Debits (dr)

Credits (cr)

   

   

   

   

MORE ON T ACCOUNTS

The equations again must always have equal amounts on each side.

Accounts on the left side of the equation have a left side normal balance and accounts on the right have a right side normal balance.

Bank  

Debits (dr)

Credits (cr)

   

   

   

   

NORMAL BALANCE

The side of the account that is increased.

EXAMPLE

Account balances increase on the normal balance side of an account

Account balances decrease on the side opposite the normal balance side of an account.

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2-1

INCREASES AND DECREASES IN ACCOUNTS

http://www.youtube.com/watch?v=DfX_mbbBsYo

CLOSURE

Account balances increase on the normal balance side of the account.

Account balances decrease on the side opposite the normal balance side of the account.

QUICK REVIEW

Draw the accounting equation on a T account What are the two accounting rules that

regulate increases and decreases of account balances.

Assets=Liabilities + Owner’s Equity

Account balances increase on the normal balance side of an account/Account Balances decrease on the side opposite the normal balance side of an account.

LESSON 2-2Analyzing How Transactions Affect Accounts

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2-2RECEIVED CASH FROM OWNER AS AN INVESTMENT

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

August 1. Received cash from owner as an investment, $5,000.00.

1 12 2

3 3

4 4

page 32

1. Which accounts are affected?

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2-2

PAID CASH FOR SUPPLIES

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

August 3. Paid cash for supplies, $275.00.

1 12

3 3

4 4

page 33

1. Which accounts are affected?

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2-2

1. Which accounts are affected?

PAID CASH FOR INSURANCE

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

August 4. Paid cash for insurance, $1,200.00.

1 12

3 3

4 4

page 34

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BOUGHT SUPPLIES ON ACCOUNT page 35

August 7. Bought supplies on account from Supply Depot, $500.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

1 1

3 3

4 4

2 2

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2-2

PAID CASH ON ACCOUNT page 36

August 11. Paid cash on account to Supply Depot, $300.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

1 1

3 3

4 4

2 2

APLIA CHAPTER TWO

Work Together 2-1On Your Own 2-1Application Problem 2-1Application Problem 2-2

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LESSON 2-2

TERM REVIEW

chart of accounts

page 37

LESSON 2-3Analyzing How Transactions Affect Owner’s Equity Accounts

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2-3

RECEIVED CASH FROM SALES page 38

August 12. Received cash from sales, $295.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

1 1

3 3

4 4

2 2

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2-3

SOLD SERVICES ON ACCOUNT page 39

August 12. Sold services on account to Oakdale School, $350.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

1 1

3 3

4 4

2 2

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2-3

PAID CASH FOR AN EXPENSE page 40

August 12. Paid cash for rent, $300.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

1

1

4

4

2 2

3

3

3

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2-3

RECEIVED CASH ON ACCOUNT page 41

August 18. Received cash on account from Oakdale School, $200.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

1 1

3 3

4 4

2

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2-3PAID CASH TO OWNER FOR PERSONAL USE page 42

August 12. Paid cash to owner for personal use, $125.00.

1. Which accounts are affected?

2. How is each account classified?

3. How is each classification changed?

4. How is each amount entered in the accounts?

4

4

2

2

3

3

3

1

1