1. A CCOUNTING C HAPTER 2 USING “T” ACCOUNTS Mr. Khatcheressian 09/17/2013

2. W ELCOME !!!! In Chapter One, transactions that affect owner’s equity on the accounting equation were analyzed. In today’s lesson, the relationship of a “T” account to the accounting equation will be shown. Preview the accounting terms and definitions introduced in this lesson: T account, debit, credit and normal balance.

3. O BJECTIVES Students will define accounting terms related to analyzing transactions into debit and credit parts Identify accounting practices related to analyzing transactions into debit and credit parts. Bank Debits (dr) Credits (cr)

4. A GENDA Objectives Direct Instruction Chapter 2 Aplia Practice Complete Web-Site Assignments Closure

5. A CCOUNTING E QUATION AND T A CCOUNT Accounting Equation: an equation showing the relationship among assets, liabilities, and owner’s equity

6. T ACCOUNT The process of using debits and credits creates a ledger format that resembles the letter "T". The term "T-account" is accounting jargon for a "ledger account" and is often used when discussing bookkeeping. The left side (column) of the "T" for Debit transactions and the right side (column) of the "T" for Credit transactions.

7. T A CCOUNT The T account is the foundation of transaction analysis Debits and Credit will now be introduced Debits and Credits are neither Good or Bad. Debit means left and credit means right Bank Debits (dr) Credits (cr)

8. M ORE ON T A CCOUNTS The equations again must always have equal amounts on each side. Accounts on the left side of the equation have a left side normal balance and accounts on the right have a right side normal balance. Bank Debits (dr) Credits (cr)

9. N ORMAL B ALANCE The side of the account that is increased.

10. EXAMPLE Account balances increase on the normal balance side of an account Account balances decrease on the side opposite the normal balance side of an account.

11. 11 LES SON 2-1 INCREASES AND DECREASES IN ACCOUNTS http://www.youtube.com/watch? v=DfX_mbbBsYo

12. C LOSURE Account balances increase on the normal balance side of the account. Account balances decrease on the side opposite the normal balance side of the account.

13. Q UICK REVIEW Draw the accounting equation on a T account What are the two accounting rules that regulate increases and decreases of account balances. Assets=Liabilities + Owner’s Equity Account balances increase on the normal balance side of an account/Account Balances decrease on the side opposite the normal balance side of an account.

14. LESSON 2-2 Analyzing How Transactions Affect Accounts

15. 15 LES SON 2-2 RECEIVED CASH FROM OWNER AS AN INVESTMENT 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? August 1. Received cash from owner as an investment, $5,000.00. 11 2 2 33 44 page 32 1. Which accounts are affected?

16. 16 LES SON 2-2 PAID CASH FOR SUPPLIES 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? August 3. Paid cash for supplies, $275.00. 11 2 33 44 page 33 1. Which accounts are affected?

17. 17 LES SON 2-2 1. Which accounts are affected? PAID CASH FOR INSURANCE 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? August 4. Paid cash for insurance, $1,200.00. 11 2 33 44 page 34

18. 18 BOUGHT SUPPLIES ON ACCOUNT page 35 August 7. Bought supplies on account from Supply Depot, $500.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 11 33 44 22

19. 19 LES SON 2-2 PAID CASH ON ACCOUNT page 36 August 11. Paid cash on account to Supply Depot, $300.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 11 33 44 22

20. APLIA CHAPTER TWO Work Together 2-1 On Your Own 2-1 Application Problem 2-1 Application Problem 2-2

21. 21 LESSON 2-2 TERM REVIEW chart of accounts page 37

22. LESSON 2-3 Analyzing How Transactions Affect Owner’s Equity Accounts

23. 23 LES SON 2-3 RECEIVED CASH FROM SALES page 38 August 12. Received cash from sales, $295.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 11 33 44 22

24. 24 LES SON 2-3 SOLD SERVICES ON ACCOUNT page 39 August 12. Sold services on account to Oakdale School, $350.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 11 33 44 22

25. 25 LES SON 2-3 PAID CASH FOR AN EXPENSE page 40 August 12. Paid cash for rent, $300.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 1 1 4 4 22 3 3 3

26. 26 LES SON 2-3 RECEIVED CASH ON ACCOUNT page 41 August 18. Received cash on account from Oakdale School, $200.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 11 33 44 2

27. 27 LES SON 2-3 PAID CASH TO OWNER FOR PERSONAL USE page 42 August 12. Paid cash to owner for personal use, $125.00. 1. Which accounts are affected? 2. How is each account classified? 3. How is each classification changed? 4. How is each amount entered in the accounts? 4 4 2 2 3 3 3 1 1