1. The Simple Ledger Debit and Credit Theory4 1

2. PowerPoint 4–1 Chapter 4 The Simple Ledger
The equation analysis sheet for the Coca Cola Company??
are a much more efficient and organized way to record transactions! 2

3. Figure 4.2: Pacific Trucking Balance Sheet
PowerPoint 4– Chapter 4
Figure 4.2: Pacific Trucking Balance Sheet
How many items does Pacific Trucking’s accountant have to keep track of? 3

4. Figure 4.3: Pacific Trucking Ledger with Opening Balances
PowerPoint 4– Chapter 4
Figure 4.3: Pacific Trucking Ledger with Opening Balances 4

5. Debit and Credit Theory Debits on the left, c r edits on the right……

6. Debit and Credit Theory When viewed in T-account form, all accounts have a left and a right side.
Chapter 4 – Debit and Credit Theory | Accounting 1, 7th Edition

7. Debit and Credit Theory The word Debit is associated with the left side.
Chapter 4 – Debit and Credit Theory | Accounting 1, 7th Edition

8. Debit and Credit Theory The word Credit is associated with the right side.
Chapter 4 – Debit and Credit Theory | Accounting 1, 7th Edition

9. Debit and Credit Theory Assets, Liabilities, and Owner’s Equity accounts have their own debit and credit rules.
Chapter 4 – Debit and Credit Theory l Accounting 1, 7th Edition

10. Debit and Credit Theory Asset accounts are on the left of the balance sheet, so their beginning value is a debit, and a debit increases their account balance.
Chapter 4 – Debit and Credit Theory l Accounting 1, 7th Edition

11. Debit and Credit Theory Liability and Owner’s Equity accounts are on the right of the balance sheet, so their beginning value is a credit, and a credit increases their account balance.
Chapter 4 – Debit and Credit Theory l Accounting 1, 7th Edition

12. Debit and Credit Theory Remember, assets behave opposite from liabilities and owner’s equity because they are on different sides of the balance sheet.
Chapter 4 – Debit and Credit Theory | Accounting 1, 7th Edition

13. Debit and Credit Theory
Let’s look at the example from your textbook together! (Pages 94 – 100)
Debit and Credit Theory

14. Debit and Credit Theory Things to remember
the fundamental must always balance
the of the transaction must always balance
there must be at least one in each transaction
A = L + OE

15. Figure 4.5: Pacific Trucking Ledger with Seven Transactions
Account Balances Chapter 4
Figure 4.5: Pacific Trucking Ledger with Seven Transactions
What is the Cash account’s account balance? 15

16. Account Balances Chapter 4
Which accounts do generally have a debit balance? Which accounts do generally have a credit

17. Trial Balance Chapter 4 Definition of a trial balance: A trial balance is a Just like the ledger it always has to be
Create a trial balance out of the accounts listed on page 112 in your
textbook. You can see the final trial balance on page 113.
Check your work!