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.
11
LE
SS
ON
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
15
LE
SS
ON
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?
16
LE
SS
ON
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?
17
LE
SS
ON
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
18
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
19
LE
SS
ON
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
21
LESSON 2-2
TERM REVIEW
chart of accounts
page 37
LESSON 2-3Analyzing How Transactions Affect Owner’s Equity Accounts
23
LE
SS
ON
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
24
LE
SS
ON
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
25
LE
SS
ON
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
26
LE
SS
ON
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
27
LE
SS
ON
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