using t accounts to help analyze transactions
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Using T-Accounts to Help Analyze Transactions. What you already (should) know!. Basic Accounting Equation Assets = Liabilities + Owner’s Equity Assets Anything of value owned by a business. Liability Anything owed by a business Owner’s Equity

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Presentation Transcript
what you already should know
What you already (should) know!
  • Basic Accounting Equation
    • Assets = Liabilities + Owner’s Equity
  • Assets
    • Anything of value owned by a business.
  • Liability
    • Anything owed by a business
  • Owner’s Equity
    • The rights the owner has to the things owned by the business.
what you are going to learn
What you are going to learn
  • T-Accounts
    • A simple tool used to aid in the analysis of business transactions.
  • T-Accounts are an extension of the basic accounting equation
    • Much more orderly way of keeping track of stuff.
slide4

Account Title

Debit

Credit

basic accounting equation as a huge t account
Basic Accounting Equation as a HUGE T-Account

Debit

Credit

ASSETS

LIABILITIES

OWNER’S EQUITY

so what
So What?
  • Anything classified as an asset increases on the debit (left) side.
  • Anything classified as a liability or owner’s equity increases on the credit (right) side.
  • The side that increases any account in called the normal balance side.
  • The words debit and credit only mean left and right, nothing more or less!
for every action
For every action…
  • Every business transaction must have at least one debit and one credit.
how do we classify
How Do We Classify
  • Memorization at first
  • It will eventually become intuitive
suggestions for learning how to analyze and classify transactions
Suggestions for Learning How to Analyze and Classify Transactions
  • Take good notes of examples
    • There are only a few basic types of transactions
  • Review examples, looking for similarities
  • A great deal of prayer… 
good examples
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T-Account Practice Sheet (later)

Good Examples
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