Chapter 4
The Simple Ledger
Quiz for this chapter will be on Friday
October 3
The Rule of Debit and Credit
Increases are shown on the same side as
normal beginning balance of the account
appears in the equation
Decreases are shown on the opposite side
A
=
Assets
Debit
Credit
L
+
OE
Liabilities Owner’s Equity
Debit
Debit
Credit
Credit
Double Entry System of Accounting
Every transaction in business is recorded
both as a debit in one (or more) accounts
and as a credit in one (or more) accounts.
Under this system, the total of the debit
entries equals the total of the credit entries
Transaction Analysis Sheet
TAS will help you to analyze a transaction
accurately.
 Step 1: Write down (in column A) the


names of accounts which are affected by
the transaction.
Step 2: Write down (in column B) whether
each of these accounts is an asset, a
liability, or the owners equity account.
Step 3: Write down (in column C) whether
the accounts are to be increased or
decreased.
Transaction Analysis Sheet
TAS will help you to analyze a transaction accur
ately.
 Step 4: Write down (in column D) whether

the accounts are to be debited or credited.
Step 5 : Write the amounts (in column E)
by which the accounts are increased or
decreased.
Transaction Analysis Sheet
After step 5, you can now make an
accounting entry.
Accounting Entry is when you record all
the changes in the accounts which is
caused by a business transaction.
Let’s do transaction #2 to #7 (Page 96
to 100) on the worksheet, I provided.
Transactions in Page 94 – 100
Transaction 1: The company purchases $200 worth
of supplies from Packaham Products to be paid later
.
Transaction 2: The company paid $500 to Dini Bro
in partial payment of the amount owed to them.
Transaction 3: The company receives $200 cash
from R Van Loon in partical payment of her debt.
Transaction 4: A delievery service is provided for a
customer at a price of $400 The customer pays cash
at the time of the service is completed.
Transactions in Page 94 - 100

Transaction 5
• A used truck costing $8000 is purchased from Dini
Bros. A cash down payment of $2500 is made at the
purchase and the balance is to be paid at a later date.
Transaction 6:
 A delievery service is completed for R. Van at a price
of $350. Van Loon does not pay for the service at the
time it is provided, but agrees to pay within 30 days.
Transaction 7:
 One of the lifting machines (part of Equipment) breaks
down. The company spends $650 cash to have the
machine repaired.
Classwork / Homework
Page 102 Review #1, 3, 4, 5, 6, 7, 12
Page 102-105 Exercises #1 and #2