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    Basic Accounting - Analyzing T-Accounts

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    Nicole Dizon
    Accounts are established records used by businesses to classify transactions as assets, liabilities, or owner's equity. A T-account consists of a vertical line separating debit and credit entries. To analyze transactions, one identifies the affected accounts, classifies them, determines the amounts, applies left-right rules to each, and records the entries in T-account form. Account balances are the differences between sides, small pencil figures are used for footing, and normal balances indicate if accounts increase or decrease.

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    Basic Accounting - Analyzing T-Accounts

    Uploaded by

    Nicole Dizon
    8 views1 page
    Accounts are established records used by businesses to classify transactions as assets, liabilities, or owner's equity. A T-account consists of a vertical line separating debit and credit entries. To analyze transactions, one identifies the affected accounts, classifies them, determines the amounts, applies left-right rules to each, and records the entries in T-account form. Account balances are the differences between sides, small pencil figures are used for footing, and normal balances indicate if accounts increase or decrease.

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    Accounts are established records used by businesses to classify transactions as assets, liabilities, or owner's equity. A T-account consists of a vertical line separating debit and credit entries. To analyze transactions, one identifies the affected accounts, classifies them, determines the amounts, applies left-right rules to each, and records the entries in T-account form. Account balances are the differences between sides, small pencil figures are used for footing, and normal balances indicate if accounts increase or decrease.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    8 views1 page

    Basic Accounting - Analyzing T-Accounts

    Uploaded by

    Nicole Dizon
    Accounts are established records used by businesses to classify transactions as assets, liabilities, or owner's equity. A T-account consists of a vertical line separating debit and credit entries. To analyze transactions, one identifies the affected accounts, classifies them, determines the amounts, applies left-right rules to each, and records the entries in T-account form. Account balances are the differences between sides, small pencil figures are used for footing, and normal balances indicate if accounts increase or decrease.

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    Analyzing T-Accounts

    Accounts

    - established separate records by the business

    Classi cation

    - accounts recognized as assets, liabilities, or the owner’s nancial interest in the business

    T account

    - consists of vertical and horizontal (top) line

    ASSETS = LIABILITIES + OWNER’S EQUITY

    + - - + - +

    Record Recorder Record Records Records


    Records
    incraeses decreases decreases increases Decreaseses Increases

    Steps to analyze the e ects of the business transactions:

    1. Analyze the nancial event

    - Identify the accounts a ected

    - classify the accounts a ected

    - determine the amount of increase or decrease for each account

    2. Apply the left-right rules for each account a ected

    3. Make the entry in the T-account form

    Account Balances

    Account Balances

    - is the di erence between the amounts on the two sides of the account

    Footing

    - small pencil gures

    Normal Balance

    - the increase of the account


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