Analyzing Transactions into Debit and Credit Parts Chapter 2 Analyzing Transactions into Debit and Credit Parts

ANALYZING THE ACCOUNTING EQUATION page 28 LESSON 2-1

ACCOUNTS T account – an accounting device used to analyze transactions page 29 T account – an accounting device used to analyze transactions Debit – amount recorded on the left side Credit – amount recorded on the right side LESSON 2-1

ACCOUNT BALANCES page 29 Normal balance – the side of the account that is increased LESSON 2-1

INCREASES & DECREASES IN ACCOUNTS page 30 LESSON 2-1

ANALYZING HOW TRANSACTIONS AFFECT ACCOUNTS Chart of Accounts – a list of accounts used by a business

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? Always list the DEBIT first 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-2

PAID CASH FOR SUPPLIES 2 1 4 3 Always list the DEBIT first page 33 August 3. Paid cash for supplies, $275.00. 2 1 4 3 Always list the DEBIT first 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 2-2

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

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? Always list the DEBIT first 3. How is each classification changed? 4. How is each amount entered in the accounts? LESSON 2-2

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

MORE TRANSACTIONS Always list the DEBIT first

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 2-3

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 2-3

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 2-3

RECEIVED CASH ON ACCOUNT page 41 August 18. 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 2-3

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 2-3