When analyzing transactions remember to ask yourself the following: 1.

What are the titles of the accounts affected 2. What is each accounts type? 3. How is each account balance affected? Practice: Analyze the following transactions using the chart attached 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Trans. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Received cash from the sale of equipment Purchased a desk for cash. Purchased supplies on account from XYZ Co. Paid cash to ABC Co. on Account Owner invests cash into the business Owner withdraws cash Received cash from sales of services Sold services on account to MND Co. Receive cash on account from DEF Co. Paid cash for rent Account Classifications Assets Liabilities Capital Change Debit in or Drawings Revenue Expenses Account Credit

Account Title

It is important to note that your Debits must always equal your credits. . The debit is always stated first followed by the credit. Ex. DR=CR=2200.00 Assignment: C21 Page 62 4-D2 Syme Page 124 #1

C21 Page 62 4-D2- Analyzing the Effect of Transactions on Ledger Accounts Name:_________________________
Trans. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Account Title Assets Liabilities

Date:_______________________
Account Classifications Capital Change Debit in or Drawings Revenue Expenses Account Credit

Syme Page 124 - Exercise 1 Name:_________________________ Date:_______________________

Trans. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Account Title Assets Liabilities

Account Classifications Capital

Change Debit in or Drawings Revenue Expenses Account Credit

When recording to the T-Accounts you need to ask yourself the same questions as you would any other time you are analyzing transactions. 1. What are the titles of the accounts affected 2. What is each accounts type? 3. How is each account balance affected? To post to a T- Account follow this procedure. 1. Identify the account and create a T-Account for it. It is important to be specific in this process as you do not create a new account for each transaction, you could re-use some of the same accounts. For example if you have revenue generated from sales and fes, we do not just create one general account we have to make two separate accounts, one called Fee Revenue and the other Sales Revenue. If there is a beginning balance, record this first on the balance side proper side. For example, lets say that Fees Revenue has a beginning balance of $2200.00 and Cash has a beginning balance of $1500.00 Your T- Account should look like the ones below. Fee Revenue DR CR $2200.00 Bal. Cash DR Bal. $1500.00

CR

2. Begin analyzing your transactions. You earned another $300.00 in Fee Revenue. Ask yourself the following questions. a. What are the titles of the accounts affected? Cash, Fee Revenue b. What is each accounts type? Asset, Revenue c. How is each account balance affected? $300.00 Now make the adjustment to your T Accounts. Fee Revenue DR CR $2200.00 Bal. $ 300.00 Cash DR Bal. $1500.00 $300.00

CR

3. Once all of your transactions have been analyzed you need to calculate the balance of your TAccount. To do this you need to do the following. a. Add separately the two sides of the account. b. Subtract the smaller total from the larger total. c. Write the difference on the larger side and circle it. d. The circled amount is called the account balance. Example: One sided calculation: Fee Revenue DR CR $2200.00 Bal. $ 300.00 Cash DR Bal. $1500.00 $300.00

CR

2500.00

1800.00

Two sided Calculations Fee Revenue DR CR 100.00 $2200.00 Bal. $ 300.00 Cash DR CR Bal. $1500.00 $300.00 200.00

100.00 2500.00 2400.00

1800.00 200.00 1600.00

4. In the end, throughout the entire analysis of all Transactions your Debits must equal your Credits. And displayed as so;

DR = CR= Amount
Assignments: C21 Page 62 4-1 Syme Page 126 #3 C21 Page 63 4-2 C21 Page 64 4-M

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Syme Page 126 #3 Date:

Page 63 4-2

Page 63 4-2 Continued

Page 64 4-M

Page 64 4-M Continued

Frank Towes operates a travel agency. The business contains the accounts below. Cash A/R Mark Howe Equipment Furniture Bank Loan Payable A/P Market Furniture Co. Frank Towes, Capital Frank Towes, Drawing Sales Rent Expense

Transactions: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Bought furniture on account from Market Furniture Co. $2400.00 Sold services on account to Mark Howe, $300.00 Bought Equipment for cash $1500.00 Returned equipment originally purchased for cash $200.00 Borrowed cash from TD Bank $1000.00 Received from mark Howe on account $100.00 Paid rent for $150.00 Sold service for cash $300.00 Paid to Market Furntirue Co. on Account $400.00 Frank Toews withdrew $100.00 from the business for his personal use.

Analyze the above using the T- Account pairs on the following page.

Towes Travel Agency

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