Download presentation
Presentation is loading. Please wait.
Published bySamson Ferguson Modified over 9 years ago
1
HFT 2401 Chapter 2 Accounting for Business Transactions
2
Basics of Double Entry Accounting T- Accounts Debits and Credits Posting Trial Balance
3
Business Events of an Economic Nature are Identified These economic events are reflected in accounts
4
Account The basic storage unit for accounting data Accounts must be established for each separate classification Cash Revenue Expenses Assets Liabilities Equity
5
T- Account Has three basic parts Title Left Side Right Side Increases are recorded on one side of an account, while decreases are recorded on the opposite Which side depends on what type of account it is
6
Sample T- Account Debits – Left Side Increase or Decrease Credits – Right Side Increase or Decrease
7
Types of Accounts Asset Accounts – Normal Balance = Debit Liability Accounts – Normal Balance = Credit Equity Accounts Permanent Equity – Normal Balance – Credit Temporary Owners Equity Revenue – Normal Balance = Credit Expense – Normal Balance = Debit
8
Asset Accounts Cash Receivables Inventories Prepaid Expenses Investments Property, Plant & Equipment (Fixed Assets)
9
Liabilities Payables Accrued Expenses Unearned Income Mortgage Payable
10
Equity Capital Account – Permanent Equity Temporary Owners Equity – Revenues & expenses Retained Earnings
11
Revenue Room Sales Food Sales Beverage Sales Gift Shop Sales Greens Fees Pro Shop Sales Banquet Sales Interest Income Dividend Income
12
Expenses Beverage Expense Food Expense Wages Expense Payroll Taxes Office Supplies Expense Electricity Fuel Insurance Property Taxes Advertising
13
Debits and Credits Debit – the left side of any account (dr) Credit – the right side of any account (cr) The difference between debits and credits is called the account balance An account may have either a debit or a credit balance
14
Double Entry Accounting Uses T-Accounts Basic Rules Asset accounts-increased by debits and decreased by credits Liability accounts are increased by credits and decreased by debits Permanent Equity – Increased by credits and decreased by debits Revenue – Increased by credits and decreased by debits Expenses – Increased by debits and decreased by credits
15
Normal Balances of Accounts AssetDebit LiabilityCredit Owners Equity CapitalCredit RevenueCredit ExpenseDebit DrawDebit
16
Ledger / General Ledger Ledger-A group of accounts General Ledger – A group of general accounts including accounts for assets, liabilities, owners equity, revenues, expenses and owner draw Chart of accounts – a complete listing of all accounts Samples Assets100-199 Liabilities200-299 Equity300-399 Revenue400-499 Expenses500-599
17
Journals & Journalizing Where daily transactions are recorded Income journal Payables journal Expense journal Payroll journal
18
Journals Includes Date of transaction Titles of accounts used Account number Explanation Page number / posting reference number Debit and credit amounts
19
Posting Transferring amounts from the individual journals to the general journal Can be done daily, but must be done at least once every accounting cycle
20
Trial Balance A listing of all accounts and their respective debit and credit balances Sum of all debits must equal sum of all credits
21
Preparing the Trial Balance Determine the balance of each account in the ledger List the accounts and show balances – debits in the left column and credits in the right column Add the debits Add the credit Total must balance
22
Homework Assignment Problem 1 Problem 4 Problem 5 Problem 7 Problem 8 Problem 9
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.