The five basic account types are: Asset Liability Owners Equity Revenue Expense What is the normal balance for each account type above? Do you think using a T account might be helpful when analyzing a transaction? What process will you use to determine the correct journal entry for a transaction?
The five basic account types are:
- Asset
- Liability
- Owners Equity
- Revenue
- Expense
What is the normal balance for each account type above? Do you think using a T account might be helpful when analyzing a transaction? What process will you use to determine the correct
1. Asset = Debit Balance
2. Liability = Credit Balance
3. Owners Equity = Credit Balance
4. Revenue = Credit Balance
5. Expense = Debit Balance
When a transaction happens in an organization, a journal entry is posted in journal ledger, Then this entry is posted into day book. From day book, these entries get posted into specific T account. Specific T account contain the effect on entry on such account for example an expense of $ 500 is paid by organization in cash. So T account of Cash will have $ 500 on credit side containing the name of such expense.
So it can be said that T account is helpful while analyzing a transaction
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