T-Accounts

Posted by Professor Cram in Weblog

Dear Professor Cram:

HI, i have a test..TOMORROW MORNING.. and need big time help on Accounting using "T" Accounts… is there any way you could help me out and explain to me the basics… Thank you

Brittany, Saskatchewan

Thanks for your excellent accounting question, Brittany.

"T" accounts are a representation of the ledgers for each account in the chart of accounts, with debits on the left and credits on the right. Usually when you are working assignments with "T" accounts, you are at the posting from the journal to the ledgers step in the accounting cycle.

If that is where you are, it is a matter of transferring each journal entry (which balanced with itself) into the various ledger accounts, shown as Ts. You enter any debit legs of the journal on the left side of the T of their respective accounts, and put the credits on the right side of their accounts. Now each individual account does not balance, but the total of all the debits from all the accounts will match the total of all the credits. (That is what the trial balance is all about.)

Other times, these exercises are used to help students learn to visualize and identify appropriate accounts for classifying transactions before journaling. Here, the challenge is determining from the description or documents provided, what accounts are affected by the transaction, and whether they are increased or decreased. The fact that assets and liabilities are affected oppositely by debits and credits only seems to confuse matters more for most students.

For more help with debits and credits, check out this free debits and credits tutorial showing which accounts are increased by debits and which are increased by credits.

Remember, debits on the left and credits on the right,

Professor Cram

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One Response to “T-Accounts”

  1. Wendell Patron says:

    Excellent webblog; …thank you for sharing.! Wendell Patron

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