ACCOUNTING
CHAPTER 2
USING “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
Objectives
Direct
Instruction Chapter 2
Aplia Practice
Complete 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 right

Bank
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.

INCREASES AND DECREASES IN
ACCOUNTS
11
http://www.youtube.com/watch?
v=DfX_mbbBsYo
LES
SON
2-1
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 2-2
Analyzing How Transactions Affect Accounts
RECEIVED CASH FROM OWNER AS
AN INVESTMENT
page 32
August 1. Received cash from owner as an investment, $5,000.00.
15
2
1
2
1
4
4
3
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?
3
LES
SON
2-2
PAID CASH FOR SUPPLIES
page 33
August 3. Paid cash for supplies, $275.00.
16
1
2
1
4
4
3
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?
3
LES
SON
2-2
PAID CASH FOR INSURANCE
page 34
August 4. Paid cash for insurance, $1,200.00.
17
1
2
1
4
4
3
3
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?
LES
SON
2-2
BOUGHT SUPPLIES ON ACCOUNT
page 35
August 7. Bought supplies on account from Supply Depot, $500.00.
18
2
1
2
1
4
4
3
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?
3
PAID CASH ON ACCOUNT
page 36
August 11. Paid cash on account to Supply Depot, $300.00.
19
2
1
1
4
4
3
3
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?
2
LES
SON
2-2
APLIA CHAPTER TWO
Work Together 2-1
On Your Own 2-1
Application Problem 2-1
Application Problem 2-2
21
TERM REVIEW

page 37
chart of accounts
LESSON 2-2
LESSON 2-3
Analyzing How Transactions Affect Owner’s
Equity Accounts
RECEIVED CASH FROM SALES
page 38
August 12. Received cash from sales, $295.00.
23
2
1
2
1
4
4
3
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?
3
LES
SON
2-3
SOLD SERVICES ON ACCOUNT
page 39
August 12. Sold services on account to Oakdale School, $350.00.
24
2
1
2
1
4
3
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
3
LES
SON
2-3
PAID CASH FOR AN EXPENSE
page 40
August 12. Paid cash for rent, $300.00.
25
1
2
3
2
4
3
1
4
1. Which accounts are affected?
3
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
LES
SON
2-3
RECEIVED CASH ON ACCOUNT
page 41
August 18. Received cash on account from Oakdale School, $200.00.
26
2
1
4
1
4
3
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?
3
LES
SON
2-3
PAID CASH TO OWNER
FOR PERSONAL USE
page 42
August 12. Paid cash to owner for personal use, $125.00.
27
2
1
3
4
3
1
2
4
1. Which accounts are affected?
3
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
LES
SON
2-3