Accounting - Lesson 4 : Transactions That Affect Assets Liabilities, and Owner’s Capital
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The document outlines a video accounting course focusing on the double-entry accounting system, its rules, and how to analyze business transactions using T-accounts. It covers key concepts such as charts of accounts, the normal balance for different account types, and the processes for identifying and classifying accounts affected by transactions. The course emphasizes understanding debits and credits for asset, liability, and owner's capital accounts.
Accounting - Lesson 4 : Transactions That Affect Assets Liabilities, and Owner’s Capital
- 1. Welcome Dear Students Your “Account Double – any Trouble”
- 2. Video Accounting course Enroll on full version enroll on course with lecturer's explanation www.elearningpower.com
- 3. Lesson 4: Learning Objectives 1 Accounts and The Double – Entry Accounting system 2 Applying the Rules of Debit and Credit – Balance Sheet Accounts 3 Business Transaction Analysis
- 4. Lesson 4 : What You'll learn WHAT IT IS IMPORTANT WHAT IS NEEDED UNDERSTAND Prepare a chart of accounts. Use T accounts to analyze Explain the purpose of Identify transactions that affect assets, the normal balance double-entry liabilities, and the owner’s accounting of accounts. capital account. Use T accounts to illustrate the Calculate the account balances rules of debit and credit for after recording business asset accounts, liability transactions. accounts, and the owner’s In accounting you need to capital account and to express analyze transactions into debit the accounting equation. and credit parts.
- 5. Key Terms chart of accounts credit debit double-entry accounting ledger normal balance T account
- 6. Summary: A chart of accounts A chart of accounts is a list of all accounts that a business uses. Each account is assigned a number, and the accounts are listed in numerical order. elements.
- 7. Summary : Double-Entry Accounting System This system is based on the accounting equation and requires that every business transaction be recorded in at least two accounts. The double-entry accounting system also has specific rules of debit and credit for recording transactions in the accounts. .
- 8. It’s Not What It In accounting debit simply means the Seems left side of an account and credit means the right side. The terms debit and credit might remind you of debit cards and credit cards.
- 9. Summary : T- account An efficient tool for using double- entry accounting is a T account. T accounts help the accountant analyze the parts of a business transaction.
- 10. The Rules of Debit and Credit Balance Sheet Accounts Debit and credit rules vary according to whether an account is classified as : • an asset, • a liability • the owner’s capital
- 11. The Rules for Assets Accounts An account’s usual balance is called its normal balance. Asset accounts follow three rules of debit and credit: • The increase side is the debit (left) side. • The decrease side is the credit (right) side. •The normal balance for an asset account is the increase, or the debit side.
- 12. The Rules for Liability and Owner’s Capital Accounts These accounts follow three rules of debit and credit: • The increase side is the credit (right) side. • The decrease side is the debit (left) side. • The normal balance for liability and owner’s capital accounts is the increase, or the credit side.
- 13. Summary : The Rules of Debit and Credit Balance Sheet Accounts
- 14. Summary: 4. Complete BUSINESS TRANSACTION ANALYSIS entry in T-account Identify and Classify the accounts affected 3. Determine the amount of 1. Determine Identify accounts - increase or decrease for and each account affected debited Classify credited accounts Determine which account is debited and credited . For what amount ? 2. Complete entry in T-account Determine accounts - increase decrease
- 15. Follow next Lesson Thank you ! Lesson 5: Enroll on full version Transactions that affect revenue, expenses and enroll on course with withdrawals lecturer's explanation www.elearningpower.com