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Accounting Chapter 2. USING T ACCOUNTS Mr. Khatcheressian 09/17/2013. Welcome!!!!. In Chapter One, transactions that affect owners equity on the accounting equation were analyzed. In todays lesson, the relationship of a T account to the accounting equation will be shown. - PowerPoint PPT Presentation

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Bell Ringer!!!!

Accounting Chapter 2USING T ACCOUNTS

Mr. Khatcheressian 09/17/2013

Welcome!!!! In Chapter One, transactions that affect owners equity on the accounting equation were analyzed.

In todays 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.

ObjectivesStudents 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.

BankDebits (dr)Credits (cr)AgendaObjectivesDirect Instruction Chapter 2Aplia PracticeComplete Web-Site AssignmentsClosure

Accounting Equation and T AccountAccounting Equation: an equation showing the relationship among assets, liabilities, and owners equity

T ACCOUNTThe 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 AccountThe T account is the foundation of transaction analysisDebits and Credit will now be introducedDebits and Credits are neither Good or Bad.Debit means left and credit means right

BankDebits (dr)Credits (cr)More on T AccountsThe 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.BankDebits (dr)Credits (cr)Normal BalanceThe side of the account that is increased.

EXAMPLEAccount balances increase on the normal balance side of an accountAccount balances decrease on the side opposite the normal balance side of an account.

11LESSON 2-1INCREASES AND DECREASES IN ACCOUNTS

http://www.youtube.com/watch?v=DfX_mbbBsYoClosureAccount 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 reviewDraw the accounting equation on a T accountWhat are the two accounting rules that regulate increases and decreases of account balances.

Assets=Liabilities + Owners 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 AccountsLESSON 2-29/17/20131415LESSON 2-2RECEIVED CASH FROM OWNER AS AN INVESTMENT2. 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, $5,000.00.11223344page 321. Which accounts are affected?16LESSON 2-2

PAID CASH FOR SUPPLIES2. 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, $275.00.1123344page 331. Which accounts are affected?17LESSON 2-21. Which accounts are affected?

PAID CASH FOR INSURANCE2. 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, $1,200.00.1123344page 3418BOUGHT SUPPLIES ON ACCOUNTpage 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?1133442219LESSON 2-2

PAID CASH ON ACCOUNTpage 36August 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?11334422APLIA CHAPTER TWO

Work Together 2-1On Your Own 2-1Application Problem 2-1Application Problem 2-221LESSON 2-2TERM REVIEWchart of accountspage 37LESSON 2-3Analyzing How Transactions Affect Owners Equity AccountsLESSON 2-39/17/2013Blue2223LESSON 2-3

RECEIVED CASH FROM SALESpage 38August 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?1133442224LESSON 2-3

SOLD SERVICES ON ACCOUNTpage 39August 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?1133442225LESSON 2-3

PAID CASH FOR AN EXPENSEpage 40August 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?11442233326LESSON 2-3

RECEIVED CASH ON ACCOUNTpage 41August 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?113344227LESSON 2-3

PAID CASH TO OWNER FOR PERSONAL USEpage 42August 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?442233311