1. LESSON 2-1 Using T Accounts

2. WHAT IS THE ACCOUNTING EQUATION

3. List 3 Accounting Concepts Business Entity Unit of Measurement Realization of Revenue

4. What are 3 Accounting Concepts Business Entity –Financial information is recorded and reported separately from the owner’s personal financial information Unit of Measurement –Business transactions are stated in numbers that have common values – that is, using a common unit of measurement. Realization of Revenue –Revenue is Recorded at the time goods or services are sold

5. Classifications Accounts Receivable –ASSET Sales –REVENUE Accounts Payable –LIABILITY Rent Expense –EXPENSE Prepaid Insurance –ASSET Drawing –OWNER’S EQUITY Utilities Expense –EXPENSE Cash –ASSET Capital –OWNER’S EQUITY Advertising Expense –EXPENSE Supplies –ASSET

6. Classifications Accounts Receivable –ASSET Sales –REVENUE Accounts Payable –LIABILITY Rent Expense –EXPENSE Prepaid Insurance –ASSET Drawing –OWNER’S EQUITY Utilities Expense –EXPENSE Cash –ASSET Capital –OWNER’S EQUITY Advertising Expense –EXPENSE Supplies –ASSET

7. Big T Asset =Liabilities +Owner’s Equity Left SideRight Side

8. Little T Account CASH or AP or CAPITAL or SALES Left SideRight Side Debit SideCredit Side

9. Little T Account CASH When a company receives money what do they do with it When a company pays out money, how do they do it Make a DepositWrite a Check Debit Credit

10. Normal Balance Asset =Liabilities +Owner’s Equity Any AssetAny LiabilityAny OE Left SideRight Side Debit CreditDebit Credit DebitCredit Normal Balance

11. Increase / Decrease Asset =Liabilities +Owner’s Equity Any AssetAny LiabilityAny OE Left SideRight Side Debit CreditDebit Credit DebitCredit Normal Balance Increase Decrease Increase Decrease Increase Decrease

12. Cash Supplies Kim Park, Capital AR –Oakdale School Prepaid Insurance AP – Supply Depot DebitCreditDebit Credit Debit Credit Normal Balance Normal Balance Normal Balance Increase Decrease DebitCreditDebit Credit Debit Credit Normal Balance Normal Balance Normal Balance Increase Decrease Increase Decrease Increase Decrease Increase Decrease Increase Decrease ASSETASSETASSET ASSETLIABILITYOWNER’S EQUITY

13. Work Together 2-1 Workbook page 21 Textbook page 31

14. Cash AR – Christine Kelly Jeff Dixon, Capital AP – Miller Supplies AP – Wayne Office Supplies Supplies DebitCreditDebit Credit Debit Credit Normal Balance Normal Balance Normal Balance Increase Decrease DebitCredit Debit Credit Debit Credit Normal Balance Normal Balance Normal Balance Increase Decrease Increase Decrease Increase Decrease Increase Decrease Increase Decrease Prepaid Insurance Debit Credit Normal Balance Increase Decrease ASSET ASSET ASSET ASSET LIABILITY LIABILITY OWNER’S EQUITY

15. Class Work On Your Own 2-1

16. Cash AR – Lee McCann Vickie Monson, Capital Prepaid Insurance AP – Topline Supplies AR – Sonya Lopez DebitCreditDebit Credit Debit Credit Normal Balance Normal Balance Normal Balance Increase Decrease DebitCredit Debit Credit Debit Credit Normal Balance Normal Balance Normal Balance Increase Decrease Increase Decrease Increase Decrease Increase Decrease Increase Decrease Supplies Debit Credit Normal Balance Increase Decrease ASSET ASSET ASSET ASSET ASSET LIABILITY OWNER’S EQUITY

17. Homework Application 2-1

18. TERMS REVIEW T account debit credit normal balance