1 - Double Entry System

Debits and Credits Rules
| Normal Balance
| Game - Debits and Credits
| Summary of The Rules
| Quiz
Courage | Welcome to AccountingAccounting
|
Rap SongDebits
|
and Credits
| Double Entry Accounting
| Example
The Rules Debits and Credits in Accounting World- Double-E

| Normal Balance
| Quiz
|
Rap SongDebits
|
and Credits
| Example
Accounting Rap Song

| Normal Balance
| Quiz
|
Rap SongDebits
|
and Credits
| Example
C4
Debits and Credits

A T-account represents a ledger account and is a tool used
to understand the effects of one or more transactions .

| Normal Balance
| Quiz
|
Rap SongDebits
|
and Credits
| Example
Normal Balances of Assets, Liability, and Stockholders

Accounts
Type of Account
Normal Balance
Asset
Debit balance
Liability
Credit balance
Stockholders Equity
Credit balance
Revenue
Credit balance
Expense
Debit balance
Dividend
Debit balance

| Normal Balance
| Quiz
Normal Balance
| Chart of Accounts P1Chart
|
of Accounts P2
Chart of Accounts
Following is a typical chart of accounts, which is used in several assignments. Every company has its own unique accounts and numbering system.
Assets
166 Accumulated depreciationStore equipment

222 Employee retirement program payable
167 _______ equipment
223 Employee union dues payable
168 Accumulated depreciation_______
224 Federal unemployment taxes payable
equipment
225 FICA taxes payable
101 Cash
169 Machinery
226 Estimated vacation pay liability
102 Petty cash
170 Accumulated depreciationMachinery
103 Cash equivalents
173 Building _______
Unearned Revenues
104 Short-term investments
174 Accumulated depreciationBuilding _______
105 Fair value adjustment, _______ securities (S-T)
175 Building _______
230 Unearned consulting fees
106 Accounts receivable
176 Accumulated depreciationBuilding _______231 Unearned legal fees
107 Allowance for doubtful accounts
179 Land improvements _______
232 Unearned property management fees
108 Legal fees receivable
180 Accumulated depreciationLand
233 Unearned _______ fees
improvements _______
109 Interest receivable
234 Unearned _______ fees
110 Rent receivable
181 Land improvements _______
235 Unearned janitorial revenue
111 Notes receivable
182 Accumulated depreciationLand
236 Unearned _______ revenue
119 Merchandise inventory
238 Unearned rent
120 __________ inventory
183 Land
121 __________ inventory
124 Office supplies
Notes Payable
Natural Resources
125 Store supplies
240 Short-term notes payable
126 _______ supplies
185 Mineral deposit
241 Discount on short-term notes payable
128 Prepaid insurance
186 Accumulated depletionMineral deposit 245 Notes payable
129 Prepaid interest
251 Long-term notes payable
131 Prepaid rent
252 Discount on long-term notes payable
132 Raw materials inventory
Intangible Assets
133 Goods in process inventory, _______
191 Patents
134 Goods in process inventory, _______
Long-Term Liabilities
192 Leasehold
135 Finished goods inventory
253 Long-term lease liability
193 Franchise
255 Bonds payable
194 Copyrights
Long-Term Investments
256 Discount on bonds payable
195 Leasehold improvements
257 Premium on bonds payable
196
Licenses
141 Long-term investments
258 Deferred income tax liability
197 Accumulated amortization_______
142 Fair value adjustment, _______ securities (L-T)
144 Investment in _______
145 Bond sinking fund
CurrentAssets
Liabilities
PlantAssets
Current Liabilities
151 Automobiles
201 Accounts payable
152 Accumulated depreciationAutomobiles
202 Insurance payable
153 Trucks
203 Interest payable
154 Accumulated depreciationTrucks
204 Legal fees payable
155 Boats
207 Office salaries payable
156 Accumulated depreciationBoats
208 Rent payable
157 Professional library
209 Salaries payable
158 Accumulated depreciationProfessional
210 Wages payable
library
211 Accrued payroll payable
159 Law library
214 Estimated warranty liability
160 Accumulated depreciationLaw library
215 Income taxes payable
161 Furniture
216 Common dividend payable
162 Accumulated depreciationFurniture
217 Preferred dividend payable
163 Office equipment
218 State unemployment taxes payable
164 Accumulated depreciationOffice equipment
219 Employee federal income taxes payable
165 Store equipment
221 Employee medical insurance payable
Equity
Owners Equity
301 ______________, Capital
302 ______________, Withdrawals
303 ______________, Capital
304 ______________, Withdrawals
305 ______________, Capital
306 ______________, Withdrawals
Paid-In Capital
307 Common stock, $ _______ par value
308 Common stock, no-par value
309 Common stock, $ _______ stated value
310 Common stock dividend distributable
311 Paid-in capital in excess of par value,
Common stock

| Normal Balance
| Quiz
Normal Balance
|
of Accounts P2
CA
Chart of Accounts
312 Paid-in capital in excess of stated value,
No-par common stock
Standard CostVariance
CA-1
Miscellaneous Expenses
580 Direct material quantity variance

313 Paid-in capital from retirement of common stock
581 Direct material price variance
314 Paid-in capital, Treasury stock
582 Direct labor quantity variance
315 Preferred stock
583 Direct labor price variance
316 Preferred
Paid-in capital
in
excess
of
par
value,
stock
584 Factory overhead volume variance
585 Factory overhead controllable variance
Retained Earnings
318 Retained earnings
319 Cash dividends (or Dividends)
320 Stock dividends
Other EquityAccounts
321 Treasury stock, Common
322 Unrealized gainEquity
323 Unrealized lossEquity
Revenues
401 ______________ fees earned
402 ______________ fees earned
403 ______________ services revenue
404 ______________ services revenue
405 Commissions earned
406 Rent revenue (or Rent earned)
407 Dividends revenue (or Dividend earned)
408 Earnings from investment in _______
409 Interest revenue (or Interest earned)
410 Sinking fund earnings
413 Sales
414 Sales returns and allowances
415 Sales discounts
CostofSales
Cost of Goods Sold
502 Cost of goods sold
505 Purchases
506 Purchases returns and allowances
507 Purchases discounts
508 Transportation-in
Manufacturing
520 Raw materials purchases
521 Freight-in on raw materials
530 Factory payroll
531 Direct labor
540 Factory overhead
541 Indirect materials
542 Indirect labor
543 Factory insurance expired
544 Factory supervision
545 Factory supplies used
546 Factory utilities
547 Miscellaneous production costs
548 Property taxes on factory building
549 Property taxes on factory equipment
550 Rent on factory building
551 Repairs, factory equipment
552 Small tools written off
560 Depreciation of factory equipment
561 Depreciation of factory building
655 Advertising expense

656 Bad debts expense
657 Blueprinting expense
658 Boat expense
659 Collection expense
661 Concessions expense
662 Credit card expense
663 Delivery expense
664 Dumping expense
667 Equipment expense
Amortization, Depletion, and
668 Food and drinks expense
Depreciation
671 Gas and oil expense
672 General and administrative expense
601 Amortization expense_______
673 Janitorial expense
602 Amortization expense_______
674 Legal fees expense
603 Depletion expense_______
676 Mileage expense
604 Depreciation expenseBoats
677 Miscellaneous expenses
605 Depreciation expenseAutomobiles
678 Mower and tools expense
606 Depreciation expenseBuilding _______
679 Operating expense
607 Depreciation expenseBuilding _______
680 Organization expense
608 Depreciation expenseLand
681 Permits expense
682 Postage expense
609 Depreciation expenseLand
683 Property taxes expense
684 Repairs expense_______
610 Depreciation expenseLaw library
685 Repairs expense_______
611 Depreciation expenseTrucks
612 Depreciation expense_______ equipment 687 Selling expense
613 Depreciation expense_______ equipment 688 Telephone expense
689 Travel and entertainment expense
614 Depreciation expense_______
690 Utilities expense
615 Depreciation expense_______
691 Warranty expense
695 Income taxes expense
Employee-Related Expenses
Expenses
620 Office salaries expense

621 Sales salaries expense
622 Salaries expense
623 _______ wages expense
624 Employees benefits expense
625 Payroll taxes expense
Financial Expenses
630 Cash over and short
631 Discounts lost
632 Factoring fee expense
633 Interest expense
Insurance Expenses
635 Insurance expenseDelivery equipment
636 Insurance expenseOffice equipment
637 Insurance expense_______
Rental Expenses
640 Rent expense
641 Rent expenseOffice space
642 Rent expenseSelling space
643 Press rental expense
644 Truck rental expense
645 _______ rental expense
GainsandLosses
701 Gain on retirement of bonds
702 Gain on sale of machinery
703 Gain on sale of investments
704 Gain on sale of trucks
705 Gain on _______
706 Foreign exchange gain or loss
801 Loss on disposal of machinery
802 Loss on exchange of equipment
803 Loss on exchange of _______
804 Loss on sale of notes
805 Loss on retirement of bonds
806 Loss on sale of investments
807 Loss on sale of machinery
808 Loss on _______
809 Unrealized gainIncome
810 Unrealized lossIncome
811 Impairment gain
812 Impairment loss
ClearingAccounts
901 Income summary
902 Manufacturing summary
Supplies Expenses

| Normal Balance
| Quiz
Normal Balance
|
of Accounts P2
650 Office supplies expense
651 Store supplies expense
652 _______ supplies expense
653 _______ supplies expense
GAME Debits or Credits
GAME
| Normal Balance
| Quiz
C4
Double-Entry Accounting
Assets
Assets
ASSETS
Debit
Liabilities
Liabilities
LIABILITIES
Credit
Debit
Credit
Equity
Equity
EQUITIES
Debit
Credit

| Normal Balance
| Quiz
|
Rap SongDebits
|
and Credits
| Example
Example
1/ If we purchase equipment and pay by cash then we will book the
transaction in the following way:
Dt. Equipment (Normal Balance + Debit)
Ct. Cash (Normal Balance Debit)
(Assets) =
(Assets) =
Equipment = Balance Sheet (Assets)

Cash= Balance Sheet (Assets)
If Normal Balance Debit and we book the transaction on the same side Debit then we can say
our Assets increase
If Normal Balance Debit and we book the transaction on the side Credit not Debit and we book
the transaction then we can say our Assets decrease (because opposite side to Normal Balance)
Debits and Credits Rules | Normal Balance | Game - Debits and Credits | Summary of The Rules | Quiz
Courage | Welcome to Accounting | Accounting Rap Song | Debits and Credits | Double Entry Accounting | Example
Summary of the Rules of Debits and Credits

1/ Asset Accounts (Debit Balance) are increased by debits and decreased by
credits.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6

2/ Liability Accounts (Credit Balance) are increased by credits and decreased
by debits.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6

3/ Equity Accounts (Credit Balance) are increased by credits and decreased by
debits.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6

4/ Revenue Accounts (Credit Balance) are increased by credits and decreased
by debits.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6

5/ Expense Accounts (Debit Balance) are increased by debits and decreased
by credits.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6

6/ Dividend Accounts (Debit Balance) are increased by debits and decreased
by credits.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6
The Rules Debits and Credits
1. Review Question
The double-entry system is a logical method for recording transactions and results in equal debits and
credits for each transactions:
a.
True.
b.
False.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
2. Review Question
The normal balance of an expense is a credit:
a.
True.
b.
False.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
3. Review Question
The normal balance of a revenue is a credit:
a.
True.
b.
False.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
4. Review Question
The normal balance of assets is a debit:
a.
True.
b.
False.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
5. Review Question
The normal balance of liabilities is a debit:
a.
True.
b.
False.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
6. Review Question
The left side of an account is:
a.
Blank.
b.
A description of the account.
c.
The debit side
d.
The balance of the account

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
7. Review Question
The right side of an account is:
a.
Is the correct side.
b.
Reflects all transactions for the accounting period.
c.
Shows all the balances of the account in the system.
d.
Is the credit side.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
8. Review Question
An account consists of:
a.
A title, a debit balance, a credit balance.
b.
A title, a left side, and a debit balance.
c.
A title, a debit side, and a credit side.
d.
A title, a right side, and a debit balance.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
9. Review Question
A T-account is:
a.
What the computer uses to organize bytes of information.
b.
A special account used instead of a trial balance.
c.
Used for accounts that have both a debit and credit balance.

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12
10. Review Question

The double-entry system requires that each transaction must be recorded:
a.
In at least two different accounts.
b.
In two sets of books.
c.
In a journal and in a ledger.
d.
First as a revenue and then as an expense

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12

| Normal Balance
| Quiz
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12

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Debits and Credits Rules

The Rules Debits and Credits in Accounting World- Double-E

Accounting Rap Song

Debits and Credits Rules

Debits and Credits

to understand the effects of one or more transactions .

Debits and Credits Rules

Normal Balances of Assets, Liability, and Stockholders

Debits and Credits Rules

166 Accumulated depreciationStore equipment

Debits and Credits Rules

580 Direct material quantity variance

655 Advertising expense

620 Office salaries expense

Debits and Credits Rules

GAME Debits or Credits

Debits and Credits Rules

Equipment = Balance Sheet (Assets)

Summary of the Rules of Debits and Credits

Debits and Credits Rules

Summary of the Rules of Debits and Credits

Debits and Credits Rules

Summary of the Rules of Debits and Credits

Debits and Credits Rules

Summary of the Rules of Debits and Credits

Debits and Credits Rules

Summary of the Rules of Debits and Credits

Debits and Credits Rules

Summary of the Rules of Debits and Credits

Debits and Credits Rules

The Rules Debits and Credits

Debits and Credits Rules

The Rules Debits and Credits

Debits and Credits Rules

The Rules Debits and Credits

Debits and Credits Rules

The Rules Debits and Credits

Debits and Credits Rules

The Rules Debits and Credits

Debits and Credits Rules

The Rules Debits and Credits

A description of the account.

The debit side

The balance of the account

Debits and Credits Rules

The Rules Debits and Credits

Is the correct side.

Reflects all transactions for the accounting period.

Shows all the balances of the account in the system.

Is the credit side.

Debits and Credits Rules

The Rules Debits and Credits

A title, a debit balance, a credit balance.

A title, a left side, and a debit balance.

A title, a debit side, and a credit side.

A title, a right side, and a debit balance.

Debits and Credits Rules

The Rules Debits and Credits

What the computer uses to organize bytes of information.

A special account used instead of a trial balance.

Debits and Credits Rules

The Rules Debits and Credits

10. Review Question