Analyzing business transactions through debit and credit 06272013

  • 2,730 views
Uploaded on

 

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
2,730
On Slideshare
0
From Embeds
0
Number of Embeds
2

Actions

Shares
Downloads
12
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. 27 June 2013
  • 2.  Analyzing business transactions would involve a dual effect in any of the elements of the accounting equation.  These dual effects would be analyzed and recorded in terms of debit and credit.
  • 3.  Account – a detailed record of the changes that have occurred in a particular asset, liability or owner’s equity during a period of time.  Consists of three parts:  The title of the account  Left or debit side  Right or credit side
  • 4.  T-Account – a simplified format of account that resembles the letter T.  The vertical line in the letter divides the account into its left and  right sides. The account title rests on the horizontal line. DEBIT CREDIT left side right side Title of account
  • 5.  Debit  Indicates left  Abbreviated as Dr  Came from the Latin word debere which originally meant ‘debtor’  Credit  Indicates right  Abbreviated as Cr  Came from the Latin word credere which originally meant ‘creditor’
  • 6. ASSETS = LIABILITIES + OWNER’S EQUITY Left or debit side ASSETS Right or credit side LIABILITIES AND OWNER'S EQUITY (REVENUE - EXPENSE) Debit balance Credit balance Title of account
  • 7.  This pattern of recording debits and credits is based on the accounting equations: Rules of Debit and Credit = + Debit Credit Debit Credit Debit Credit for for for for for for Increase Decrease Decrease Increase Decrease Increase ASSETS LIABILITIES OWNER'S EQUITY
  • 8.  Franco Diaz invested P100,000 cash to begin his accounting business.  The business purchased office supplies on account for P5,000.  The business paid one year rental for its office space, P24,000.  The business paid ½ of the amount owed in buying office supplies.