Accounting Lecture Notes: T-Accounts

Overview of T-Accounts

• Work Together 2-1: Reference to the assignment on page 35 of the textbook.
• Directions for each T-account:
  • Label the debit and credit sides.
  • Select increase on the increase side and decrease on the decrease side.
  • Identify the normal balance.

Key Concepts

• T-Accounts: Understand that each account can be represented as a T-account.
  • Left side = Debit
  • Right side = Credit
  • Remember: Left Debit, Right Credit (repeat this mantra).

Determining Normal Balance

• The normal balance is linked to the type of account:
  • Determine if the account is an asset, liability, or owner's equity.
  • The normal balance is always on the increase side of the account.

Steps to Complete T-Accounts

1. Label Debit and Credit:
   • Always start with Left (Debit) and Right (Credit).
2. Identify Account Type:
   • Examples:
     • Cash = Asset (Left Side) => Normal Balance = Debit
     • Accounts Receivable = Asset => Normal Balance = Debit
     • Supplies = Asset => Normal Balance = Debit
     • Prepaid Insurance = Asset => Normal Balance = Debit
     • Accounts Payable = Liability => Normal Balance = Credit
     • Parker Vogel Capital = Owner's Equity => Normal Balance = Credit

Examples Addressed in Class

• Cash:

  • Type: Asset
  • Debit: Increase
  • Credit: Decrease
  • Normal Balance: Debit

• Accounts Receivable:

  • Type: Asset
  • Debit: Increase
  • Credit: Decrease
  • Normal Balance: Debit

• Supplies:

  • Type: Asset
  • Debit: Increase
  • Credit: Decrease
  • Normal Balance: Debit

• Prepaid Insurance:

  • Type: Asset
  • Debit: Increase
  • Credit: Decrease
  • Normal Balance: Debit

• Accounts Payable:

  • Type: Liability
  • Debit: Decrease
  • Credit: Increase
  • Normal Balance: Credit

• Parker Vogel Capital:

  • Type: Owner's Equity
  • Debit: Decrease
  • Credit: Increase
  • Normal Balance: Credit

Final Thoughts

• Remember to apply the rules consistently across all accounts.
• Practice identifying account types and their corresponding normal balances.