Unit 3 Recording
Transactions in T- Accounts
From Unit 2:
Cash
Acct Rec
Equipment Building
Acct Pay
Bank Loan
Capital
From Unit 2: Information from balance sheet-
Cash
1000
Acct Rec
500
Equipment Building
2000
40000
Acct Pay
2500
Bank Loan
20000
Capital
21000
There must be at least two entries (dual entry
accounting) to keep the balance sheet balanced.
Sept 21
Cash
Acct Rec
Equipment Building
Acct Pay
Bank Loan
Capital
1000
+200
500
-200
2000
40000
2500
20000
21000
1200
300
2000
40000
2500
20000
21000
Asset and Liability transaction:
Cash
Acct Rec
Equipment Building
Acct Pay
Bank Loan
Capital
500
-200
2000
40000
2500
20000
21000
Sept 21
1000
+200
300
2000
40000
2500
-500
20000
21000
Sept 23
1200
-500
700
300
2000
40000
2000
20000
21000
What was this transaction?
Cash
Acct Rec
500
-200
2000
40000
2500
20000
21000
Sept 21
1000
+200
300
2000
40000
2500
-500
20000
21000
Sept 23
1200
-500
700
300
2000
40000
2000
20000
21000
Sept 24
Equipment Building
+3000
Acct Pay
Bank Loan
+3000
Capital
Unit 3: T-Accounts
To more easily reflect the changes that transactions
create, we will learn the concept of T-Accounts.
• Essentially each item
in the balance sheet
becomes its own
separate account.
• We describe each side
of the “T” as a Debit or
a Credit.
T-Accounts may look something like this:
Note: Assets balances all always
Debits and grow on Debit side
Liabilities and Capital always
Credits and grow on Debit side!
T- Account Transactions:
Cash
$500
Sept 20
$300
$800
Balance $600
Acct Rec
$400
$300 Sept20
$200 Sept 24 Balance $100
Bank Loan
$5000
Sept 24 $200
Balance
$4800