1. Chapter 2

2. The “T” Account Debit Side Cash Credit Side Debit Balance:
Credit Balance:

3. T Account Example
Create and update T Account for a sample Supplies Account:
Bought $200 worth of supplies
Returned $50 worth of supplies
Bought $150 worth of supplies
Used $30 worth of supplies

4. T Account Example
Debit Side Supplies Credit Side
Balance:

5. The General Ledger
The General Ledger keeps a running tally of the value of an account and is a more formal version of the T Account.

6. The General Ledger Supplies No. 102 Date Explanation Ref DR CR Balance
Sept 1
Sept 3
Sept 10
Sept 15
200
150 50 30
300
270

7. The Trial Balance
A list of accounts and their balances at a given time, usually at the end of the accounting period.

8. Campus Laundromat
Trial Balance
September 30, 2010
Account
Debit
Credit
Cash
Prepaid Insurance
Laundry Equipment
Notes Payable
Accounts Payable
Ng Ye, Capital
Ng Ye, Drawings
Service Revenue
Advertising Expense
Rent Expense
13,000
1,200
25,000
700
200
1,000
41,000
15,000
20,000
6,200

9. Locating Problems Using the TB
If the error is a multiple of 10, recalculate the account balances.
If the error is divisible by 2, look for a value that is half of the error, it may have been entered into the wrong column
If the error is divisible by 9, a transposition error might have occurred (eg. 29 has become 92).
Find all of the errors in P2-11A