A T-account is a graphical representation of a general ledger account divided into debit and credit columns, used to illustrate the effects of transactions. It is a key tool in double-entry bookkeeping, reflecting that every financial transaction affects at least two accounts to maintain the accounting equation. The T-account includes columns for date, explanation, folio, and the amount to provide clarity on accounting transactions.

1. T-ACCOUNT

2. WHAT IS T-ACCOUNT?
• When a general ledger account is graphically represented it is known as T-
Account
• T-Account helps in knowing individual ledger accounts and what will be the
effect of each transactions
• While preparing individual ledger each transaction gets organised and
summarized
• The T-Account exactly looks like the letter “t”

3. WHAT IS T-ACCOUNT?
• The T-Account is divided into two columns. The left one is the debit side and
the right side is the credit column. The name of the account is placed at the
top
• T-Account is a tool of double entry bookkeeping as it helps in showing how
one side of an accounting transaction is reflected in another account

4. WHAT IS DOUBLE-ENTRY BOOKKEEPING?
“Double entry is the fundamental concept underlying present-day bookkeeping
and accounting. Double-entry accounting is based on the fact that every financial
transaction has equal and opposite effects in at least two different accounts. It is
used to satisfy the equation Assets = Liabilities + Equity, in which each entry is
recorded to maintain the relationship.”

5. COLUMNS OF T-ACCOUNT
• Date (credit side/debit side) – The date of the credit/debit entry is entered in
this column
• Explanation (credit side/debit side) – A brief explanation of the credit/debit
entry is entered in the column
• “F” or folio (credit side/debit side) – The journal page number from where the
credit/debit entry was taken is entered in this column
• Credit/debit - The amount of the credit/debit entry is entered in this column

6. USES OF T- ACCOUNT
• It gives a more clear representation of the flow of accounting transactions
through the accounts in which transactions are stored
• To clarify more difficult accounting transactions
• Can be helpful in determining the proper balance for the account
• Reminds us that every transaction or adjustment will have to involve at least
two accounts

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