T Account Example

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Accounts

Accounts are set up for each item on the financial statements and are analyzed to provide details for financial reports. They each fall into one of the following categories:

• Balance Sheet Accounts - classified as assets, liabilities, or owner's equity

• Income Statement Accounts - classified as revenues or expenses.

Each daily transaction of a business has an impact on the at least two accounts. For example paying $100 on an account in your payables would lower your cash level, but it would also lower your obligation.

Simplest form

Name of the Account

Left side

debit

Right side

credit

Amounts entered on the left side of an account, regardless of the account title, are called debits to the account. Amounts entered on the right side of an account are credits.

debit balance
Asset Accounts

Nature of the Account

credit balance
Liability Accounts
Owner's Equity

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Amazon.com
Most popular books for Accounts

Understanding Small Business Accounts

Paperback: 128 pages

Publisher: How to Books (February, 2003)

Understanding Accounts

Paperback: 72 pages

Publisher: Dk Pub Merchandise; (March 2001)