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Analyzing Transactions into debit and credit parts

Analyzing Transactions into debit and credit parts. Chapter 3. T-Account- An accounting device used to analyze transactions. Assets = Liabilities and Owner’s Equity. Using T-Accounts. Debit- An amount recorded on the Left side of the t-account

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Analyzing Transactions into debit and credit parts

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  1. Analyzing Transactions into debit and credit parts Chapter 3

  2. T-Account- An accounting device used to analyze transactions. Assets = Liabilities and Owner’s Equity Using T-Accounts

  3. Debit- An amount recorded on the Left side of the t-account • Credit- An amount recorded on the left side of the t-account Assets = Liabilities and Owner’s Equity DEBIT CREDIT Using T-Accounts

  4. Normal Balance- the side of the account that is increased Any Asset Assets = Liabilities and Owner’s Equity Debit Normal Balance Credit Using T-Accounts

  5. Normal Balance- The side of the account that is increased Any Liability Assets = Liabilities and Owner’s Equity Debit Credit Normal Balance Using T-Accounts

  6. Normal Balance- The side of the account that is increased Owner’s Equity Account Assets = Liabilities and Owner’s Equity Debit Credit Normal Balance Using T-Accounts

  7. The normal side is the side that increases Any Asset Assets = Liabilities and Owner’s Equity Debit Normal Balance Credit Using T-Accounts

  8. The normal side is the side that increases Any Liability Assets = Liabilities and Owner’s Equity Debit Credit Normal Balance Using T-Accounts

  9. The normal side is the side that increases Owner’s Equity Account Assets = Liabilities and Owner’s Equity Debit Credit Normal Balance Using T-Accounts

  10. Questions to ask yourself • Which accounts are being affected • How is each account classified • How is each classification changed • How is each amount entered in the account Analyzing how transactions affect accounts

  11. Aug. 1 Received cash from owner as an investment, $10,000. • Which accounts are being affected • Cash and Capital • How is each account classified • Cash is an asset and Capital is an OE. • How is each classification changed • Assets are increased. OE is increased. • How is each amount entered in the account • Assets increase on the debit side- Therefore the 10,000 will go on the debit side of the Cash T-Account • OE increase on the credit side- Therefore the 10,000 will go on the credit side of the Capital T-Account Analyzing how transactions affect accounts

  12. Aug. 3 Paid cash for supplies, $1,577 • Which accounts are being affected • Supplies and Cash • How is each account classified • Supplies and cash are both assets • How is each classification changed • Supplies (asset) is being increased • Cash (asset) is being decreased • How is each amount entered in the account • Assets increase on the debit side- Therefore $1,577 will go on the debit side of the Supplies T-Account • Assets decrease on the credit side- Therefore $1,577 will also go on the credit side of the Cash T-Account Analyzing how transactions affect accounts

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