Acc 107 Chapter 3

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Author:
natalya19
ID:
130457
Filename:
Acc 107 Chapter 3
Updated:
2012-01-25 05:18:28
Tags:
Accounting 107
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Description:
College Accounting Chapter 3
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  1. T Account
    • - Shaped like a T
    • - Debit means Left
    • - Credit means Right
    • - Account Name on Top
  2. Define T Account :
    - Every T account has an increase side and a decrease side.

    - Some accounts increase on the debit side and some accounts increase on the credit side.
  3. How do you balance a T Account?
    1. Foot the Debit and Credit Sides


    2. Find the difference between the debit and credit totals.

    3. Write Balance on side with larger total

    Example:

    • $3,500 debit footing
    • - $3,130 credit footing
    • ---------------------------
    • $370 balance
  4. Define: Foot
    To "Foot" means to Total
  5. 7 Rules of Debits and Credits

    Rule # 1
    Asset Accounts

    • + Increase on the debit
    • - Decrease on the credit side
  6. 7 Rules of Debits and Credits

    Rule # 2
    In every transaction, debits must equal credits.
  7. 7 Rules of Debits and Credits

    Rule # 3
    Liability Accounts

    • - Decrease on the debit side
    • +Increase on the credit side
  8. 7 Rules of Debits and Credits

    Rule # 4
    Capital Account

    • - Decrease on the debit side
    • + Increase on the credit side
  9. 7 Rules of Debits and Credits

    Rule # 5
    Drawing Account

    • + Increase on the debit Side
    • - Decrease on the credit side

    [Just Like Asset Acount]
  10. 7 Rules of Debits and Credits

    Rule # 6
    Revenue Accounts

    • - Decrease on the debit side
    • + Increase on the credit side

    [Just Like Liability & Capital Accounts]
  11. 7 Rules of Debits and Credits

    Rule # 7
    Expense Accounts

    • +Increase on the debit side
    • - Decrease on the credit side

    [Just Like Asset Account]
  12. The Trial Balance
    • - A listing of all accounts and their balances
    • - A totaling of debits and credits
    • - Is proof that debits equal credits and that the accounting equation has remained in balance.
    • -Used as an aid in preparing financial statements.
  13. Trial Balance Heading:
    • 1. Name of the company
    • 2. Title of the document - " Trial Balance"
    • 3. Date of the trial balance
  14. Trial Balance Accounts?
    • All asset accounts are first
    • Liabilites are shown next
    • Now the owner's equity accounts
    • Then the revenue account
    • Finally, the expense account

    Debits=Credits

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