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    QSN 2 Fabm T Account

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    Kisha Del mundo
    The document describes how to use a T-account to record business transactions and increase or decrease asset, liability, and equity accounts. A T-account has the account title at the top with debit amounts on the left side and credit amounts on the right side. It provides examples of transactions for a new art gallery business and the rules for debiting and crediting each account. These transactions are then summarized in a T-account showing the debits and credits to the cash account over the month.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    QSN 2 Fabm T Account

    Uploaded by

    Kisha Del mundo
    620 views3 pages
    The document describes how to use a T-account to record business transactions and increase or decrease asset, liability, and equity accounts. A T-account has the account title at the top with debit amounts on the left side and credit amounts on the right side. It provides examples of transactions for a new art gallery business and the rules for debiting and crediting each account. These transactions are then summarized in a T-account showing the debits and credits to the cash account over the month.

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    Qsn 2 Fabm t Account

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    The document describes how to use a T-account to record business transactions and increase or decrease asset, liability, and equity accounts. A T-account has the account title at the top with debit amounts on the left side and credit amounts on the right side. It provides examples of transactions for a new art gallery business and the rules for debiting and crediting each account. These transactions are then summarized in a T-account showing the debits and credits to the cash account over the month.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    620 views3 pages

    QSN 2 Fabm T Account

    Uploaded by

    Kisha Del mundo
    The document describes how to use a T-account to record business transactions and increase or decrease asset, liability, and equity accounts. A T-account has the account title at the top with debit amounts on the left side and credit amounts on the right side. It provides examples of transactions for a new art gallery business and the rules for debiting and crediting each account. These transactions are then summarized in a T-account showing the debits and credits to the cash account over the month.

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    © All Rights Reserved
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    The T- Account

    Use of T-account:
    An account is a form of record that summarizes the increases or decreases of any specific
    accounting value. The simplest form of an account is the T-account because the accounting equation
    resembles the capital letter T. It is an informal tool used to analyze the effect of a transaction in the
    assets, liabilities, owner’s equity, revenue and expenses.
    The three elements of an account are:
    1. Account title
    2. Debit
    3. Credit
    The T-account and the rules of Debit and Credit:
    Account Title

    Debit Credit

    1. Increase in asset 1. Decrease in asset


    2. Decrease in Liability 2. Increase in Liability
    3. Decrease in Owner’s equity 3. Increase in Owner’s Equity
    (Withdrawals and expenses) (Investment, additional investment,
    revenue/income)

    Illustration:
    May 2 Gisel Ong opened Anime World gallery. She invested P 300,000.00 on this
    initial endeavor.
    Rules: Debit increases in assets, Credit increases in owner’s equity.
    Cash Ong. Capital

    5/2 300,000 5/2 300,00

    May 3 Gisel On issued a promissory note for a P 100,000.00 loan from Allay Bank.
    The note carries a 12% interest per annum. The interest and the principal
    are payable after one year.
    Rules: Debit increases in assets. Credit increases in liabilities.
    Cash Notes Payable

    5/2 300,000 5/3 100,000


    5/3 100,000
    May 5 Gisel Ong acquired office equipment to be used for the office paying P
    180,000 in cash.
    Rules: Debit increases in Assets. Credit decreases in assets.
    Cash Office equipment
    5/2 300,000 5/5 180,000 5/5 180,000
    5/3 100,000
    May 5 Gisel Ong acquired furniture from Bloom’s costing P 40,000, paying P
    12,000 and the remaining balance at the end of the month (Note: A
    compound entry is needed in this transaction)
    Rules: Debit increases in assets. Credit decreases in assets. Credit increases in liabilities.
    Cash Furniture and Fixtures

    5/2 300,000 5/5 180,000 5/5 40,000


    5/3 100,000 5/5 12,000
    Accounts payable

    5/5 28,000

    May 6 Gisel Ong rented office space and paid two months’ rent in advance,
    all costing P 18,000.00
    Cash Prepaid Rent
    5/2 300,000 5/5 180,000 5/6 18,000
    5/3 100,000 5/5 12,000
    5/6 18,000

    May 7 Ms. Ong paid Asia Insurance Co. P 10,800 for one year insurance of the
    gallery.
    Rules: Debit increases in assets. Credit decreases in assets.
    Prepaid Rent Cash

    May 8 The P 7,200 worth of art supplies ordered from National Bookstore were
    delivered on account.
    Rules: Debit increases in assets. Credit increases in liabilities.

    May 11 An oil painting of Naruto and an acrylic painting of L was delivered to


    Mr. ku To. Gisel Ong billed Mr. Ku To P 120,000 for the paintings delivered.
    Rules: _____________________________________________________
    May 12 -30.

    Summary:

    Cash

    5/2 300,000.00 5/5 180,000.00


    5/3 100,000.00 5/5 12,000.00
    5/15 50,000.00 5/6 18,000.00
    5/20 80,000.00 5/7 10,800.00
    5/23 90,000.00 5/12 3,000.00
    5/18 18,000.00
    5/25 4,000.00
    5/29 540.00

    620,000.00 246,340.00

    Prepare the T Accounts for the following:


    376,660.00
    a. Ong, Capital
    b. Notes Payable
    c. Office equipment
    d. Furniture and Fixtures
    e. Accounts payable
    f. Prepaid Rent
    g. Prepaid Insurance
    h. Arts Supplies
    i. Accounts Receivable
    j. Painting Revenue
    k. Ong, drawing
    l. Unearned painting Revenue
    m. Salaries Expense
    n. Utilities Expense
    o. Utilities Payable

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