Presentation on theme: "Analyzing Transactions into Debit and Credit Parts Chapter 3."— Presentation transcript:
Analyzing Transactions into Debit and Credit Parts Chapter 3
Analyzing the Accounting Equation The accounting equation can be represented by a T Assets = Liabilities + Owners Equity
T Account An accounting device used to analyze transactions Left Side Debit Side Right Side Credit Side
Debits and Credits Debit-An amount recorded on the left side –Abbreviation DR Credit-An amount recorded on the right side –Abbreviation CR
Normal Balances The side of the account that is increased Account balances increase on the normal balance side of an account. Account balances decrease on the side opposite the normal balance side of an account.
Chart of Accounts A list of accounts used by a business
?s for Analyzing Transactions into DR and CR Parts Which accounts are affected? How is each account classified? How is each classification changed? How is each amount entered in the accounts? Use these every time a transaction is analyzed.
Where do Expenses and Drawing Go? Both expenses and Drawing decrease the owners equity account, therefore their normal balance is DR.