Transcript
Learning Objectives
LESSON
2-2 Analyzing How Transactions
Affect Accounts
LO4 Restate and apply the four questions necessary to analyze transactions for starting a business into debit and credit parts.
Chart of Accounts
Each transaction changes the balances of at least two accounts.
A list of accounts used by a business is called a
chart of accounts.
SLIDE 2
Lesson 2-2
Chart of Accounts for Delgado Web Services
Balance Sheet Accounts
(100) ASSETS
110 Cash
120 Petty Cash
130 Accounts Receivable—Main Street Services
140 Accounts Receivable—Valley Landscaping
150 Supplies
160 Prepaid Insurance
(200) LIABILITIES
210 Accounts Payable—Canyon Office Supplies
220 Accounts Payable—Mountain Graphic Arts
(300) OWNER’S EQUITY
310 Michael Delgado, Capital
320 Michael Delgado, Drawing
330 Income Summary
Income Statement Accounts
(400) REVENUE
410 Sales
(500) EXPENSES
510 Advertising Expense
520 Cash Short and Over
530 Communications Expense
540 Equipment Rental Expense
550 Insurance Expense
560 Miscellaneous Expense
570 Supplies Expense
SLIDE 3
Lesson 2-2
Received Cash from Owner as an
Investment
January 2. Received cash from owner as an investment, $2,000.00.
Cash and Michael Delgado, Capital are affected.
1
2
Cash is an asset account.
Owner’s Equity is increased.
3
Michael Delgado,
Capital is credited.
4
Cash is debited.
4
Michael Delgado, Capital is an owner‘s equity account.
2
Assets are increased.
3
LO4
SLIDE 4
Lesson 2-2
Paid Cash for Supplies
January 2. Paid cash for supplies, $165.00.
Supplies and Cash are affected.
1
2
Supplies and Cash are assets.
Assets (Cash) are decreased.
3
Cash is credited.
4
Assets (Supplies) are increased.
3
Supplies is debited.
4
LO4
SLIDE 5
Lesson 2-2
Paid Cash for Insurance
January 3. Paid cash for insurance, $900.00.
Prepaid Insurance and
Cash are affected.
1
2
Prepaid Insurance
and Cash are assets.
Assets (Cash) are decreased.
3
Cash is credited.
4
Assets (Prepaid Insurance) are increased.
3
Prepaid Insurance
is debited.
4
LO4
SLIDE 6
Lesson 2-2
Bought Supplies on Account
January 5. Bought supplies on account from
Canyon Office Supplies, $220.00.
Supplies and Accounts Payable—Canyon Office Supplies are affected.
1
2
Supplies is an asset.
Liabilities are increased.
3
Accounts Payable—
Canyon Office
Supplies is credited.
4
Supplies
is debited.
4
Accounts Payable—
Canyon Office
Supplies is a
liability.
2
Assets are increased.
3
LO4
SLIDE 7
Lesson 2-2
Paid Cash on Account
January 9. Paid cash on account to
Canyon Office Supplies, $100.00.
Accounts Payable—Canyon Office Supplies
and Cash are affected.
1
2
Cash is an asset.
Liabilities are
decreased.
3
Accounts Payable—
Canyon Office
Supplies is debited.
4
Cash is
credited.
4
Accounts Payable—
Canyon Office
Supplies is a
liability.
2
Assets are
decreased.
3
LO4
SLIDE 8
Lesson 2-2
Lesson 2-2 Audit Your Understanding
1. State the four questions used to analyze a transaction.
ANSWER
1. Which accounts are affected?
2. How is each account classified?
3. How is each classification changed?
4. How is each amount entered in the accounts?
SLIDE 9
Lesson 2-2
Lesson 2-2 Audit Your Understanding
2. What two accounts are affected when a business buys supplies on account?
ANSWER
Supplies
Accounts Payable
SLIDE 10
Lesson 2-2