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The Simple Ledger Debit and Credit Rules. Pacific Trucking. Let’s go through the Transactions.

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Presentation on theme: "The Simple Ledger Debit and Credit Rules. Pacific Trucking. Let’s go through the Transactions."— Presentation transcript:

1 The Simple Ledger Debit and Credit Rules

2 Pacific Trucking. Let’s go through the Transactions

3 Pacific Trucking. 2. Company pays $200 to Dini Bros in partial payment of the amount owed to them. 3. The company receives $200 cash from R. Van Loon in partial payment of her debt. 4. A delivery service is provided for a customer at a price of $400. The customer pays cash at the time the service is completed.

4 Pacific Trucking. 5. A used truck costing $8000 is purchased from Dini Bros. A cash down payment of $2500 is made at the time of the purchase and the balance is to be paid at a later date. 6. A delivery service is completed for R. Van Loon 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. 7. One of the lifting machines (part of equipment) breaks down. The company spends $650 cash to have the machine repaired.

5 Pacific Trucking After all the transactions, these are the cash and capital T-accounts for Pacific Trucking.

6 Double-Entry System of Accounting If your accounts do not balance after a transaction, you have DEFINITELY made an error. If your accounts do balance, it is PROBABLY correct, but not necessarily.

7

8 Board Exercises Fiona Siska is the owner-operator of a fitness clinic. The ledger used in her business contains the following accounts: -Cash -Accounts Receivable (several) -Supplies -Furniture -Equipment -Automobile -Accounts Payable (several) -Flora Siska, Capital

9 Board Exercises 1. The business receives $300 cash from J. Parker, one of the accounts receivable. 2. The business purchases $200 worth of supplies for cash. 3. Little Bros., one of the Accounts Payable, is paid $100. 4. The owner withdraws $250 for her personal use. 5. A new piece of equipment costing $500 is purchased from Champion Sports. The business pays $125 cash at the time of purchase, with the balance of $375 to be paid within 30 days. 6. A new customer signs up for a fitness course. The $300 fee is paid in cash.

10 Homework Exercises Page 103 #2, 3


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