Chapter 4 Analyzing Transactions into Debit and Credit Parts
advertisement
Chapter 3 Analyzing Transactions into Debit and Credit Parts T- Account Assets = Liabilities + Owners Equity Each account receives a T-Account so that we may analyze the balance of the account Analyzing the T-Account Left Side Debit Right Side Credit Each account will have its own T-account Cash,Supplies,Pre-paid Insurance Assets Left Side Debit Normal Bal... + = Liabilities + Owners Equity Right Side Credit - Cash Supplies Prepaid Insurance Left Side Debit Right Side Credit Normal Bal... - + Please work on work together and “ON your own on page 44) All companies have a sheet of paper that tell you what all of their accounts are it is called – Chart of Accounts Assets • • • • Liabilities Cash • Accounts Payable Supplies Owners Equity Prepaid Insurance • Barbara Trevino, Capital Accounts Receivable 4 questions you need to ask…. What two accounts does it effect? What types of accounts are they? How is each account balanced changed? How is each amount entered into the TAccounts? 1. Received cash from owner as an investment $10,000 What two accounts does it effect? Cash Barbara Trevino, Capital What types of accounts are they? Asset Owners Equity How is each account balanced changed? Cash Increased Barbara Trevino, Capital increase How is each amount entered into the T- Accounts 4 questions you need to ask…. What two accounts does it effect? What types of accounts are they? How is each account balanced changed? How is each amount entered into the TAccounts? How is each amount entered into the T- Accounts Received Cash from Owner 10,000 Cash Debit Normal Bal... + 10,000 Barbara Trevino, Capital Credit Debit Credit Normal Bal... - - + 10,000 So we say for this transaction we Debit Cash, Credit Capital Two major rules we must remember……... Accounting Equation - Do our assets = our liabilities + our owners Equity???? Do our debits = our credits??? 1. Paid cash for supplies $1,577 What two accounts does it effect? Cash Supplies What types of accounts are they? Asset How is each account balanced changed? Cash Decreases Supplies increase How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Paid Cash for supplies 1,577 Cash Debit Normal Bal... + Supplies Credit Debit Credit Normal Bal.... 1,577 + - 1,577 So we say for this transaction we Credit cash, Debit Supplies 1. Paid cash for Insurance What two accounts does it effect? Cash Prepaid Insurance What types of accounts are they? Asset How is each account balanced changed? Cash Decreases Prepaid Insurance increase How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Paid Cash for Insurance Cash Debit Normal Bal.. + Credit Prepaid Insurance Debit Credit Normal Bal.. - + 1200 1200 - So we say for this transaction we Credit cash, Debit PPI Bought supplies on account from Butler Cleaning Supplies 2,720 What two accounts does it effect? Supplies Butler Cleaning Supplies What types of accounts are they? Asset Liability How is each account balanced changed? Supplies Increase Butler Cleaning Supplies increase How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Bought supplies on account Supplies Debit Credit Normal Bal.. + 2,270 - Butler Cleaning Supplies Debit Credit Normal Bal.. - + 2,270 So we say for this transaction we Debit supplies, Credit Butler Cleaning Sup Paid cash on account to Butler Cleaning Supplies 1,360 What two accounts does it effect? Cash Butler Cleaning Supplies What types of accounts are they? Asset Liability How is each account balanced changed? Cash Decreases Butler Cleaning Supply decreases How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Paid Cash on Account Cash Debit Normal Bal.. + Credit Butler Cleaning Supply Debit Credit Normal Bal.. 1360 1360 + So we say for this transaction we Credit cash, Debit Butler cleaning supplies Please work on “Work together and On Your own” on page 50 Assets = Liabilities + Owners Equity Owners Equity Left Side Debit Normal Bal.. + Right Side Credit - Cash Supplies Prepaid Insurance Left Side Debit - Right Side Credit Normal Bal.. + Revenue Left Side Debit - Right Side Credit Normal Bal.. + Expense Left Side Right Side Debit Credit Normal Bal.. Received Cash from Sales $525 What two accounts does it effect? Cash Sales What types of accounts are they? Asset Revenue How is each account balanced changed? Cash Increases Sales Increase How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Received Cash from Sales Cash Debit Normal Bal.. + 525 Sales Credit Debit Credit Normal Bal.. - - + 525 So we say for this transaction we Debit Cash, Credit Sales Paid Cash for Rent 250 What two accounts does it effect? Cash Rent Expense What types of accounts are they? Asset Expense How is each account balanced changed? Cash Decreases Increase Rent Expense How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Paid cash for rent $250 Cash Debit Normal Bal.. + Credit Rent Expense Debit Credit Normal Bal.. 250 + 250 - So we say for this transaction we Credit Cash, Debit Rent Exp. Paid cash to owner for personal use $100 What two accounts does it effect? Cash Ben Furman, Drawing What types of accounts are they? Asset Drawing How is each account balanced changed? Cash Decrease Ben Furman, Drawing Increase How is each amount entered into the T- Accounts How is each amount entered into the T- Accounts Paid cash to owner for personal Use $100 Cash Debit Normal Bal + Credit Ben Furman, Drawing Debit Credit Normal Bal 100 + 100 - So we say for this transaction we Credit Cash, Debit Drawing Page 58 Prob 31,2,3,4,5 1 1
