So when we look at our Work Together 2-1, I want to notice that it says Work Together 2-1 P35. If you had a textbook out in front of you, that would indicate that the directions for this assignment is on page 35. But our directions read right there. For each T-account, label the debit and credit side, select increase on the increase side, select decrease on the decrease side, and then identify the normal balance. So you will notice that we have individual T-accounts because yesterday we took the accounting equation of assets equals liabilities plus owner's equity and we made that one big T-account.
We were right over there, right above Sabrina and Melina's head. We have the giant T-account. And then we went through and put in sub-T-accounts for individual accounts. The biggest thing that you need to remember is the left side of a T-account is called... Always debit.
Doesn't matter. Right side. So you should think in this class every day, left debit, right credit, left debit, right credit, left debit, right credit.
That's always left debit, right credit. Like don't associate it with credit cards or anything else. Left debit, right credit, left debit, right credit. Okay. Now the next thing changes depending on the type of account that it is.
So for example, you need to then look at the individual account, for example, supplies, and you have to ask yourself, is it an asset liability or owner's equity? Once you know that, that will determine the normal balance side. And the normal balance side is always the increase or decrease?
Increase. So normal balance is always the increase side. So that's the step that you need to do.
It doesn't matter what account it is, left debit, right credit. I say that over and over again because it just got pounded into your brain, just like that, Justin. So let's do the first one together. So it doesn't matter what account it is, what are we going to label first? Thank you Justin, that's it exactly.
So on the left hand side I'm going to put debit. On the right hand side I'm going to put credit. Whew! Because it doesn't matter.
Every T-account it's always the same. Now to do the rest of it I have to know what type of account it is. So I look at the account cash. Assets are on what side of the accounting equation? Left and left is also called debit.
So I'm going to go ahead on the left hand side and put an increase. And whatever the other side is, that will be our decrease. Now, right here it says normal balance. We need to go through and say which side is the normal balance, and the normal balance is going to be debit, because that's the side we put the plus on.
Now, let's take a look at our next account, which says accounts receivable solving company. It doesn't matter the count. Left debit.
Thank you. Left debit, right credit. Left debit, right credit. Always remember that. Accounts receivable, Sullivan Company.
Morgan is what type of an account? Is it an asset, a liability, or owner's equity? I'm sorry, I just could not hear you.
You are close. It is an asset, and I want you to know why. Okay?
Because it says receivable. If it said payable there, then it would make it a liability. So it's really easy when we're first starting to see the word accounts and then something and think, oh, it's going to be a liability. But the only things that are liability, it has the word payable in it. So this is going to be an asset, Morgan.
What side of the accounting equation is it on? Left. Okay.
And so what is the left side called? Debit. So we're going to go ahead and put the debit as the increase. And then we're going to put the credit as the decrease.
What is our normal balance, Morgan? Thank you. So let's go ahead and do supplies.
Jacob, what do we know first? Thank you. Jacob, supplies is what type of an account?
What side of the accounting equation is it on? Normal balance. Okay, so I'm going to do debit, increase, the opposite is the decrease. Sabrina, we're on prepaid insurance.
What do we know first? Yes. Now, Sabrina, the tricky question is, what type of an account is this? Yes, say it with confidence.
It is an asset. So Sabrina, what side of the accounting equation is assets on? And left is also known as?
So we're going to have our increased side as our? Yep, which is also debit. Okay, so the opposite of our increase is going to be our decrease. So Sabrina, what is our normal balance side? Woo, woo, woo, you got it.
All right, Dominic, ready? Accounts, payables, Sawyer, supplies. What do we know first?
Debit on the left and what did you say? I don't know what you said. That's why I couldn't figure it out. What is on the right? Thank you.
I wasn't quite sure. I'm like, I didn't pick that up. Okay. So now, Dominic, the next question, after we do our debit and credit sides, what type of an account is it?
It is a liability. Liabilities are on what side of the accounting equation? So what is our increase side?
Yes. So we're going to increase the credit side and we will decrease the debit side. What is our normal balance, Dominic? Yes.
Accounts payable ocean side supply. Tanner you're the winner on this one. What do we know first Tanner?
Yes. The next question that we ask ourselves is always what type of an account is it and Tanner what kind of account is it? Liabilities are on what side of the accounting equation? So our increase side is yes. So therefore debit will be our decrease.
What is our normal balance? All right George are you ready for this one? What do we know first?
Nope. Yes, so we know first, debit left, credit right. So that's always the first thing we do. Debit's left, credit's right.
Now, when we see the account title, Parker Vogel Capital, what type of account is that? We're going to try that again. What kind of account is it?
Nope, we're going to try it again. Why is it owner's equity? Anytime you see a name of a person in the word capital, That is always going to be your only owner's equity account. So this is the name of our owner, and that's going to be the name of the business. And they didn't give us that in the actual description of the assignment.
Normally it would say Parker Vogel Capital, and then it would go from there. Oh, you would actually have multiple owners if you had a partnership. So, for example, if Justin and I, if we were both in business, you would have Justin Bowers capital and I would have Mrs. Grassl capital.
There'd be two capital accounts. So when we see a name of a person and the word capital with an A because we are in accounting, I like to point that out because sometimes people write this capital with an O like Madison instead of A. We are going to assume that it is owner's equity. So Georgia, if it is owner's equity, what side of the accounting equation is it on? Right, okay.
So therefore, right side is going to be our increase or decrease? Yes. And then the opposite will be our?
Decrease. Normal balance? Yes. Bing, bing, bing. Try that on your own.