Chapter 2- Analyze Transactions into Debit and Credit Parts

A. Assets = Liabilities and Owners Equity

_______________________
Left Right
B. T Account
_______________________
Left Right
Debit Credit
C. Withdrawal- Owners name, drawing
D. Assets = Liabilities + Owners Equity (Capital)
DR CR DR CRDR CR
+ - - + - +
Bal Bal Bal
Accounts that affect Owners Equity
Revenue Expense Drawing
DR CR DR CR DR CR
- + + - + -
Bal Bal Bal
E. Minus opposite plus side.
Balance on plus side
F. Four Questions:
1. What two accounts?
2. What classification?
3. Plus or Minus?
4. Debit or Credit?
Asset Drawing Expense Capital Liability Revenue
Debit Credit Debit Credit
+ - - +
Balance Balance
G. Chart of Accounts A list of accounts used by a business.
Chapter 2 Vocab
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 T account

Normal balance The side of the account that is increased
Chart of accounts A list of accounts used by a business
Application 2-1 Form
Account Account Classification Debit Credit Debit Credit
Cash Assets x x
AR- Jens Olefson Assets x X
AR- Toni Nolan Assets X X
Supplies Assets X X
Prepaid Insurance Assets x X
AP- United
Company
Liability x x
Juan Reo, Capital Capital x x
Accounts Normal Balance Increase Side
Debit Credit
X
X
X
X
X
x
X
Decrease Side
Trans.
No.
Account Affected Accounts
Classification
Debit Credit
1 Cash Asset X
Adriana Janek, Caital Owner's Equity X
2 Cash Asset X
Utilities Expense Expense X
3 Cash Asset X
Miscellaneous Expense Expense X
4 Supplies Asset X
AP- Tri City Supplies Liability X
5 Cash Asset X
Sales Revenue X
6 Cash Asset X
Advertising Expense Expense X
7 Cash Asset X
Rent Expense Expense X
8 Cash Asset X
Sales Revenue
9 Cash Asset X
Sales Revenue X
10 Cash Asset X
Supplies Asset X
11 Cash Asset X
AP- Tri City Supplies Liability X
12 Cash Asset X
Adriana Jankex Drawing Drawing X
13 Account Recivable Asset
Sales Revenue
Entered in account
as a
Recived Cash from Owner as
an Investment
Paid cash for Utilities Expense
Paid Cash For Miscelanius
Expense
Paid supplies on account from
Tri City Supplies
Recived Cash from Sles
Paid Cash for Advertising
Paid Cash for Rent
Received Cash from Sales C
Received Cash from Sales
Paid Cash for supplies
Paid Cash to Tri City Supplies
Owner Withdrew Cash for self
Sold on account Ralph Dahl
Description of transaction