Chapter 2 The T Account Debit Side Debit

Chapter 2

The “T” Account Debit Side Debit Balance: Cash Credit Balance: Credit Side

T Account Example Create and update T Account for a sample Supplies Account: 1. Bought $200 worth of supplies 2. Returned $50 worth of supplies 3. Bought $150 worth of supplies 4. Used $30 worth of supplies

T Account Example Debit Side Balance: Supplies Credit Side

The General Ledger • The General Ledger keeps a running tally of the value of an account and is a more formal version of the T Account.

The General Ledger Supplies Date Sept 1 Sept 3 Sept 10 Sept 15 Explanation Ref No. 102 DR CR 200 50 150 30 Balance 200 150 300 270

The Trial Balance • A list of accounts and their balances at a given time, usually at the end of the accounting period.

Campus Laundromat Trial Balance September 30, 2010 Account Cash Prepaid Insurance Laundry Equipment Notes Payable Accounts Payable Ng Ye, Capital Ng Ye, Drawings Service Revenue Advertising Expense Rent Expense Debit Credit 13, 000 1, 200 25, 000 15, 000 20, 000 700 6, 200 1, 000 41, 000

Locating Problems Using the TB 1. If the error is a multiple of 10, recalculate the account balances. 2. If the error is divisible by 2, look for a value that is half of the error, it may have been entered into the wrong column 3. If the error is divisible by 9, a transposition error might have occurred (eg. 29 has become 92). • Find all of the errors in P 2 -11 A