Objectives Students will match accounting terms with their
Objectives • Students will match accounting terms with their definitions in a matching game. The game tracks accuracy and provides feedback to students. Students may repeat the game to enhance accuracy. • Students will read a story description of the concepts of debit and credit from an accounting perspective. • Students will demonstrate the concept of debit and credit by filling in the blanks to identify the sides of a sample Taccount. • Students will sort the sequence of transaction analysis into correct order. Let’s get started!
there were bankers and accountants… …but they didn’t talk to one another, because they were pompous and arrogant. The accountants were very methodical and accurate, and very, very rigid. The bankers were meticulous and also accurate, and very, very greedy. Tell me more
One day, a banker got a clever idea. He would lend customers money, but instead of actually giving them the cash, they could use this little plastic card. Customers could buy things with this card and would make monthly payments against the amount owed. Later, he thought of another idea, similar to the first, only this card would draw money directly from a customer’s checking account to pay for purchases. Both ways, cash would never really cross hands, except electronically. Tell me more
He would need to track these transactions, but he decided he didn’t want to pay for an accountant’s services, so he set up his own method. He called the first card a credit card, because he had extended credit, and when payment was made, he “credited” the account. He called the other card a debit card, and when it was used he “debited” the customer’s checking account. He did it. . NOW what?
…But because he was too pompous to admit making a mistake, he continued to do it his way. The accountants knew it was wrong, because the accounting system as it stands today has been in existence for more than 500 years…and it WORKS!! But, they wouldn’t overstep into the bankers’ world unless they were asked…and paid. So, that’s the way it has remained until this very day… Confused? ? ? Well, then…. . let’s look and see how it is SUPPOSED to work.
Debits & Credits Debit comes from the Latin root meaning “Left Hand”… …and credit, similarly, means “Right Hand. ” Wait! Tell me the story again Show me again.
Accounting Equation: Assets = Liabilities + Owner’s Equity If the account is on the left Assets = side of the equation… Cash, A/R, Supplies, Prepaid Insurance Liabilities = A/P …it increases on the left (DEBIT) side of the account. . . CASH WAIT! Show me that left-hand — right-hand thing again Show me one more time. Owner’s Equity = Capital …and decreases on the opposite side. I’m SO lost. Let’s start over I want more
Accounting Equation: Assets = Liabilities + Owner’s Equity Assets = BUT, if the account is on the Cash, A/R, Supplies, Prepaid Insurance right side of the equation… …it increases on the right (CREDIT) side of the account. . . Liabilities = A/P — Jim’s Cleaning Supplies Owner’s Equity = Capital …and decreases on the opposite side. WAIT! Show me that left-hand — right-hand thing again Show me one more time. I’m SO lost. Let’s start over Susan Smith, Capital I think I GET IT!
Now, YOU do it Remember: TWO accounts are affected by every transaction. AND There is at least ONE Debit and ONE credit for every transaction. • Received $10, 000 CASH from the owner as an investment (CAPITAL) Show me one more time I’m SO lost. Let’s start over I’m ready — Let’s do it!
Assets = Liabilities + Owner’s Equity • Received $10, 000 CASH from the owner as an investment (CAPITAL) Mark the debit and credit sides of each account by dragging the words to the proper place. Cash Susan Smith, Capital Now, place the amounts in the proper accounts and answer the question below. 10, 000 Debit Is the equation in balance after the transaction? ? ? (click your response) 10, 000 Credit Yes No Credit
So…you KNOW you did it RIGHT!! Let’s do the whole thing one more time I’ve got it! Let’s do more.
Better try again! Go back to try again Show me one more time. I’m SO lost. Let’s start over
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