charpter four accounting methods
DESCRIPTION
Charpter four Accounting methods. Debit side Credit side Luca Paciolio: Italian mathematician and Franciscan friar the father of accounting Summa de arithmetica, geometria, proportioni et proportionalita. 4.1 The Double-Entry System of Accounting. Double-entry accounting Debit - PowerPoint PPT PresentationTRANSCRIPT
![Page 1: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/1.jpg)
Charpter four
Accounting methods
![Page 2: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/2.jpg)
www.nordridesign.com LOGO
4.1 The Double-Entry System of Accounting
• Debit side• Credit side• Luca Paciolio: • Italian mathematician and Franciscan friar the father of accounting Summa de arithmetica, geometria, prop
ortioni et proportionalita
![Page 3: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/3.jpg)
www.nordridesign.com LOGO
New words and terms 4.1
• Double-entry accounting
• Debit
• Credit
• balance
![Page 4: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/4.jpg)
www.nordridesign.com LOGO
4.2 The Account
• The T- Accounts
• Four-Column Account Format
• Normal balance of an account
• The chart of accounts
![Page 5: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/5.jpg)
www.nordridesign.com LOGO
Title
Dr Cr
Notes:Notes:
The T-account
The increase and decrease should be recorded seperatly on debit side or credit side of every accounts
The increase and decrease should be recorded seperatly on debit side or credit side of every accounts
![Page 6: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/6.jpg)
www.nordridesign.com LOGO
Four-column account format
Account: *** Accout No:***
Date Item Post.
Ref.
Debit Credit Balance
Debit Credit
![Page 7: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/7.jpg)
www.nordridesign.com LOGO
New words and terms 4.2• Increases• Decreases• Account classification• T-account• entry• running balance• post• JR=Journal Reference
![Page 8: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/8.jpg)
www.nordridesign.com LOGO
New words and terms 4.2
• debit-balance accounts
• credit-balnace accounts
• permanent accounts
• temporary accounts
• overdraw
• overpay
• miscellaneous expense
![Page 9: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/9.jpg)
www.nordridesign.com LOGO
4.3 Debits and Credits
• The symbol of debit and credit
Debit side: Dr
Credit side: Cr
• The rules of debit and credit
![Page 10: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/10.jpg)
www.nordridesign.com LOGO
Assets Liabilities
Owner’s equity
Beginning
balances XXX
XXXincrease XXXdecrease
XXXEnding
balances
XXXdecrease
Beginning
balances XXX
XXXincrease
XXX
Ending
balances
![Page 11: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/11.jpg)
www.nordridesign.com LOGOSummary Summary
Account elements
The effects
Debit Credit balances
Assets + - Debits
Liabilites
Owner’s Equity- + Credits
Revenues - + no
Expenses + - no
![Page 12: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/12.jpg)
www.nordridesign.com LOGO
4.4 Applying for Double-Entry Accounting
• use of assets, liabilities and owner’s equity
• use of revenues, expenses and net income
![Page 13: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/13.jpg)
www.nordridesign.com LOGOTransaction (1) :owner invested $ 30 000 cash in the business
• Assets = liabilities + Owner’s Equity
cash Ted Andy, Capital
+30000 +30000
![Page 14: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/14.jpg)
www.nordridesign.com LOGOTransaction (2) :purchased office equipment on account, $ 2 500Assets = Liabilites + Owner’s EquityCash+ office = Accounts + Ted Andy, Capital
equipment payables
+2 500 = +2 500
![Page 15: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/15.jpg)
www.nordridesign.com LOGO
Transaction (3) :purchased office supplies for cash, $ 350Assets = Liabilites + Owner’s EquityCash+ office + office = Accounts + Ted Andy, Capital
supplies equipment payables
-350 +350
![Page 16: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/16.jpg)
www.nordridesign.com LOGO
Transaction (4) :paid amount owed to a creditor, $ 500
Assets = Liabilites + Owner’s EquityCash+ office + office = Accounts + Ted Andy, Capital
supplies equipment payables
-500 -500
![Page 17: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/17.jpg)
www.nordridesign.com LOGOTransaction (5) :purchased office supplies on account, $ 400
Assets = Liabilites + Owner’s EquityCash+ office + office = Accounts + Ted Andy, Capital
supplies equipment payables
+400 = +400
![Page 18: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/18.jpg)
www.nordridesign.com LOGO Transaction (6) :owner withdrew $ 300 for personal use
Assets = Liabilites + Owner’s EquityCash+office+office = Accounts + Ted’s– Ted ‘s+revenues-Expense
supplies equipment payables Capital Drawing
-300 = +300
![Page 19: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/19.jpg)
www.nordridesign.com LOGOTransaction (7) :received cash as payment for professional fees, $ 3 500Assets = Liabilites + Owner’s EquityCash+office+office = Accounts + Ted’s– Ted ‘s+revenues-Expense
supplies equipment payables Capital Drawing
+3500 = +3500
![Page 20: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/20.jpg)
www.nordridesign.com LOGO Transaction (8) :paid office rent $ 1 000
Assets = Liabilites + Owner’s EquityCash+office+office = Accounts + Ted’s– Ted ‘s+revenues-Expense
supplies equipment payables Capital Drawing
-1000 = +1000
![Page 21: Charpter four Accounting methods](https://reader036.vdocuments.site/reader036/viewer/2022062301/5681323b550346895d98a41c/html5/thumbnails/21.jpg)
www.nordridesign.com LOGOTransaction (9) : paid telephone expense, $ 75
Assets = Liabilites + Owner’s EquityCash+office+office = Accounts + Ted’s– Ted ‘s+revenues-Expense
supplies equipment payables Capital Drawing
- 75 = +75