Respond to the following in a minimum of 175 words: Chapter 3 is probably the most important chapter of the entire course. It describes how the accounting equation-table method we looked at in Chapt
The Linked in video "Four steps to Bookkeeping" was a good video. A "T" account is one where debit is on the left and Credit is on the right. T accounts are used to analyze transactions. For every debit, there must be a credit. Debits will always match Credits. To break down Cash account in my words, I think it means that a Cash Account is required to be paid in full. Liability is things that must be paid for like a monthly bill or credit. Liabilities are things that the owner needs to pay like credit accounts or items purchased on credit. Owner's Equity is what the owner has invested and owns. With business transactions you must analyze the financial event, apply left side right side rules for every account, and then do the T account form. By learning and understanding the proper things to do and when to do it is very important in accounting. A business can also have more then one T account. T accounts can be used for many things and types of transactions.
T accounts represent the increases and the decreases in a company. For example in chapter three, we see that all of the increase into the cash account are listed on the left side of the equation, and all of the decreases like the accounts payable are listed on the right side. These help accountants distinguish between the two and make it easier to organize the money that is constantly coming in and out of the company. On the left side of the t account you typically see things that are labeled under company assets and on the right side of the account you will see liabilities as well as the overall capital of the company. With this information, we can figure out account balances which shows us our net income or net loss. If the total assets out weighs the liabilities and losses, then you can record the assets on the left side of the balance sheet. If losses and liabilities are greater than cash flow and assets then you record the loss on the right side of the balance sheet.
After reading and interpreting chapter 3 of “T accounts, it is a method used by accountants and bookkeepers that gets its name from the T shape formed by the two columns used to record entries. Also called double-entry accounting, T-accounting provides a visual aid to see how debits and credits affect accounts in the general ledger. While accounting programs have made T-account data entry obsolete, most programs re-create double entries within the software and create reports in this familiar format. But what with each account listed debits and credits, on the left and right sides of the T-account page, as mentioned; each transaction can be entered twice, once as a debit and once as a credit, in two accounts. To this, it would provided an easy way to check for errors, as the sum of debits would match the sum of credits. With a transaction not balancing within that way, the problem could be found and corrected prior to posting in the general ledger. But the overall process of checking each T-account for debit and credit balance is called a trial balance.
