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Every “T” Account has: An Increase Side, and A Decrease Side
But, Some Accounts Increase on the Debit Side And, Some Accounts Increase on the Credit Side
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Remember ASSETS + Increase on Debit Side Decrease on Credit Side Dr.
ASSET ACCOUNTS Increase on Debit Side Decrease on Credit Side Dr. Cr. + ASSETS
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IN EVERY TRANSACTION DEBITS MUST EQUAL CREDITS
RULE #2 IN EVERY TRANSACTION DEBITS MUST EQUAL CREDITS
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DEBITS = CREDITS OFFICE SUPPLIES CASH DR. CR. DR. CR. + + $800 $800
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Remember Liability + Decrease on Debit Side Increase on Credit Side
LIABILITY ACCOUNTS Decrease on Debit Side Increase on Credit Side Dr. Cr. + Liability
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DEBITS = CREDITS + + EQUIPMENT ACCOUNTS PAYABLE DR. CR. DR. CR. $3000
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Remember + Dr. Cr. Decrease on Increase on Debit Side Credit Side
CAPITAL ACCOUNT Decrease on Debit Side Increase on Credit Side Dr. Cr. + JUST LIKE LIABILITY ACCOUNTS
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DEBITS = CREDITS + + CASH M. ADAMS, CAPITAL DR. CR. DR. CR. $25,000
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You have to Remember + Dr. Cr. JUST LIKE ASSET ACCOUNTS
DRAWING ACCOUNT Increase on the Debit Side Decrease on the Credit Side Dr. Cr. + JUST LIKE ASSET ACCOUNTS
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DEBITS = CREDITS + + M. ADAMS, DRAWING CASH DR. CR. DR. CR. $1,500
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You have to Remember + Dr. Cr. Decrease on Increase on Debit Side
REVENUE ACCOUNTS Decrease on Debit Side Increase on Credit Side Dr. Cr. + JUST LIKE LIABILITY & CAPITAL ACCOUNTS
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You have to Remember + Dr. Cr. JUST LIKE ASSET ACCOUNTS
EXPENSE ACCOUNTS Increase on the Debit Side Decrease on the Credit Side Dr. Cr. + JUST LIKE ASSET ACCOUNTS
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DEBITS = CREDITS WAGES EXPENSE CASH DR. CR. DR. CR. + + $750 $750
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BALANCING “T” ACCOUNTS
STEP #1 FOOT DEBIT & CREDIT SIDES CASH 2,000 500 570 430 1 1,200 300 200 5050 80 650 150 1 FOOTING 3,500 To “Foot” means to Total FOOTING 3,130
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BALANCING A “T” ACCOUNT
STEP #2: Find balance by finding the difference between the debit and credit totals. $3,500 debit footing – $3,130 credit footing $ 370 balance
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BALANCING “T” ACCOUNTS
Balance is written on side with larger total CASH 2,000 500 570 430 1 1,200 300 200 5050 80 650 150 1 3,500 BALANCE 370 3,130
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TRIAL BALANCE LIST OF ALL ACCOUNTS INCLUDING THEIR BALANCES
TOTALING DEBITS AND CREDITS PROVING DEBITS EQUAL CREDITS USED AS AN AID IN PREPARING FINANCIAL STATEMENTS
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance HEADING should include: Name of the Company Title of Document “Trial Balance” Date of the Trial Balance
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance Cash Accounts Receivable Supplies 80 00 Prepaid Insurance Delivery Equipment All Asset accounts listed first
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance Cash Accounts Receivable Supplies 80 00 Prepaid Insurance Delivery Equipment Accounts Payable Liabilities are shown next
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance Cash Accounts Receivable Supplies 80 00 Prepaid Insurance Delivery Equipment Accounts Payable Jessica Jane, Capital Jessica Jane, Drawing Now the Owner’s Equity Accounts
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance Cash Accounts Receivable Supplies 80 00 Prepaid Insurance Delivery Equipment Accounts Payable Jessica Jane, Capital Jessica Jane, Drawing Delivery Fees Then the Revenue Account
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance Cash Accounts Receivable Supplies 80 00 Prepaid Insurance Delivery Equipment Finally, the Expenses Accounts Payable Jessica Jane, Capital Jessica Jane, Drawing Delivery Fees Wages Expense Rent Expense Telephone Expense 50 00
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Jessica Jane’s Campus Delivery Trial Balance June 30, 20--
Account Title Debit Balance Credit Balance Cash It Balances!!! Debits = Credits Accounts Receivable Supplies 80 00 Prepaid Insurance Delivery Equipment Accounts Payable Jessica Jane, Capital Jessica Jane, Drawing Delivery Fees Wages Expense Rent Expense Telephone Expense 50 00
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