LESSON 2-1 Using T Accounts 2/22/2019 LESSON 2-1 Using T Accounts

ANALYZING THE ACCOUNTING EQUATION page 28 LESSON 2-1

ACCOUNTS page 29 LESSON 2-1

ACCOUNT BALANCES page 29 LESSON 2-1

INCREASES AND DECREASES IN ACCOUNTS page 30 LESSON 2-1

TERMS REVIEW page 31 T account debit credit normal balance LESSON 2-1

LESSON 2-1 Analyzing How Transactions Affect Accounts 2/22/2019 LESSON 2-2 Analyzing How Transactions Affect Accounts

chart of accounts A List of Accounts. The accounts are listed in order of Assets, Liabilities and Owner’s Equity. Assets are listed by their liquidity. Liquidity is the term for how quickly an asset can be converted to cash. Liabilities are listed in alphabetic order. Owner’s Equity has the Capital account. LESSON 2-1

RECEIVED CASH FROM OWNER AS AN INVESTMENT page 32 August 1. Received cash from owner as an investment, $5,000.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

PAID CASH FOR SUPPLIES page 33 August 3. Paid cash for supplies, $275.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

PAID CASH FOR INSURANCE page 34 August 4. Paid cash for insurance, $1,200.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

BOUGHT SUPPLIES ON ACCOUNT page 35 August 7. Bought supplies on account from Supply Depot, $500.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

PAID CASH ON ACCOUNT page 36 August 11. Paid cash on account to Supply Depot, $300.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

TERM REVIEW page 37 chart of accounts LESSON 2-1

LESSON 2-1 Analyzing How Transactions Affect Owner’s Equity Accounts 2/22/2019 LESSON 2-3 Analyzing How Transactions Affect Owner’s Equity Accounts

Sales Account Classification - Revenue that affects Owner’s Equity What does it do? - Keeps track of Revenue (Money From Sales for Cash or Sales on Account) Normal Balance Side? Credit (increase in OE) Increase Side? Credit (increase in OE) LESSON 2-1

RECEIVED CASH FROM SALES page 38 August 12. Received cash from sales, $295.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

SOLD SERVICES ON ACCOUNT page 39 August 12. Sold services on account to Oakdale School, $350.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

Expense Accounts Classification - Expense that affects Owner’s Equity What does it do? - Keeps track of Expenses Expense? Cost of doing business Normal Balance Side? Debit (decrease in OE) Increase Side? Debit (decrease in OE) LESSON 2-1

PAID CASH FOR AN EXPENSE page 40 August 12. Paid cash for rent, $300.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

RECEIVED CASH ON ACCOUNT page 41 August 12. Received cash on account from Oakdale School, $200.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

Owner’s Withdrawals Account Classification - Account that affects Owner’s Equity What does it do? - Keeps track of Owner’s Withdrawals Withdrawals? Owner takes Assets from Business Normal Balance Side? Debit (decrease in OE) Increase Side? Debit (decrease in OE) Similar to an Expense Account LESSON 2-1

PAID CASH TO OWNER FOR PERSONAL USE page 42 August 12. Paid cash to owner for personal use, $125.00. 2 1 4 3 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-1

Terms to Know Revenue Sale on Account Expense Withdrawals LESSON 2-1

LESSON 2-1