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Published byWinifred Price Modified over 9 years ago
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Chapter 4 – The Simple Ledger The T- Account A ledger is group or file of accounts that can be stored as pages in a book. Each account (cash account, A/P – J. Holla account) is given its own page in the ledger.
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Ledger & T-Accounts Important features: 1. Each balance sheet account is given its own page in the ledger. 2. The opening dollar figure is recorded in the account on the first line. 3. You must record the dollar figure on the correct side of the account. Asset balances – on the left side Liability balances – on the right side Owner’s Equity – on the right side
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T- Accounts AssetsLiabilitiesOwner’s Equity Opening Balance Opening Balance Opening Balance Debit – DR side Credit – CR side A= L+OE and Total Debits =Total Credits
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Debit & Credit Theory Every transaction must have a debit & a credit. Debits (Dr. or DR) – associated with the left side of the account Credit (Cr. or CR) – associated with the right side of the account *** This is called the double-entry system of accounting.
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Debit & Credit Theory Type of Account Beginning Value IncreasesDecreases Asset Debit Credit Liabilities & Owner’s Equity Credit Debit
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Practice Pg. 82 Review Questions #1-7 Pg. 82 Exercises #1-3 Pg. 90 Review Questions #1, 3-6 Pg. 91 Exercise #1-2
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