1. Using T-Accounts to Help Analyze Transactions

2. What you already (should) know!
Basic Accounting Equation
Assets = Liabilities + Owner’s Equity
Assets
Anything of value owned by a business.
Liability
Anything owed by a business
Owner’s Equity
The rights the owner has to the things owned by the business.

3. What you are going to learn
T-Accounts
A simple tool used to aid in the analysis of business transactions.
T-Accounts are an extension of the basic accounting equation
Much more orderly way of keeping track of stuff.

4. Account Title
Debit
Credit

5. Basic Accounting Equation as a HUGE T-Account
Debit
Credit
ASSETS
LIABILITIES
OWNER’S EQUITY

6. So What?
Anything classified as an asset increases on the debit (left) side.
Anything classified as a liability or owner’s equity increases on the credit (right) side.
The side that increases any account in called the normal balance side.
The words debit and credit only mean left and right, nothing more or less!

7. For every action…
Every business transaction must have at least one debit and one credit.

8. How Do We Classify Memorization at first
It will eventually become intuitive

9. Suggestions for Learning How to Analyze and Classify Transactions
Take good notes of examples
There are only a few basic types of transactions
Review examples, looking for similarities
A great deal of prayer… 

10. Good Examples Pg 45 Pg 46 Pg 47 Pg 48 Pg 49 Pg 51 Pg 52 Pg 53 Pg 54
T-Account Practice Sheet (later)