1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 2-1 Using T Accounts Even though the effects of transactions can be recorded in the accounting equation, as we have done in class, the procedure is not practical in an actual accounting system. Therefore a separate record is used for each account. Please note that this presentation is available on the class website.

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 2-1 TERMS Account – A record summarizing all the information pertaining to a single item in the accounting equation. Transactions – Events that impact the financial records of a business (as we have covered in class). Transactions change the balances of accounts in the accounting equation. T Account – An accounting device used to analyze transactions. Debit – An amount recorded on the left side of a T account. Credit – An amount recorded on the right side of a T account. Normal Balance – The side of the account that is increased. page 31

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 2-1 ANALYZING THE ACCOUNTING EQUATION page 28 The value of all things owed (assets) are on the left side of the accounting equation. The value of all liabilities and equity are on the right side of the accounting equation.

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 2-1 ACCOUNTS page 29

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 2-1 ACCOUNT BALANCES page 29

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 2-1 INCREASES AND DECREASES IN ACCOUNTS page 30