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T - Accounts

T-Accounts are an informal way of summarizing the affects various transactions have on an account. For example, all the transactions that involve cash will affect the cash account.  When we total that account, we will know how much cash we have to report on the Balance Sheet.

The general ledger is made up of all the accounts a business may have. Every transaction must affect at least two accounts. The following slide show sets out how to record transactions in T-Accounts.

The table below can be used to help you analyze transactions. For example if an asset account is increasing (+), then the asset account will be debited. If a liability account is increasing (+) then the account will credited.  The normal balance of an account is the side the + sign is on. For example the Office Supplies account will have a debit balance because it is an asset account.