LESSON 2-1 Using T Accounts 5/22/2018 LESSON 2-1 Using T Accounts Define and ID accounting terms related to analyzing transactions into debit and credit parts

The accounting equations can be represented as a “T” The “T” Account The accounting equations can be represented as a “T” LESSON 2-1

The “T” Account A record summarizing all the information pertaining to a single item in the accounting equation is known as an account An accounting device used to analyze transactions is called a “T” Account LESSON 2-1

The “T” Account The amount recorded on the left side is called a debit The amount recorded on the right side is called a credit Dr. Is the abbreviation for debit From latin word debere Cr. Is the abbreviation for credit From latin word credere LESSON 2-1

ACCOUNTS page 29 LESSON 2-1

The “Normal” Balance The side of the account that is increased is called the normal balance Assets are on the left side of the accounting equation and have normal debit balances Liabilities are on the right side of the accounting equation and have normal credit balances Owners equity is on the right side of the accounting equation and has a normal credit balance LESSON 2-1

ACCOUNT BALANCES page 29 LESSON 2-1

Increases and Decreases The sides of a T account are used to show increases and decreases in account balances Two basic accounting rules that regulate increases and decreases in account balances 1. Account balances increase on the normal balance side of an account 2. Account balances decrease on the side opposite the normal balance side of an account 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