How to Make a Journal Entry

Toggle fullscreen Fullscreen button

Sharing buttons:


Okay, we're going to continue on kind of where we left off in the last chapter.

When we first started out, we learned how to record business transactions using our accounting equation.

Remember the accounting equation says that, our assets


our liabilities plus owner's equity.

When we were introduced to this is our first chapter,

we recorded transactions using that.

If we had our cash account, our cash would go up 100, and

our Owner's Equity or capital account would go up by 100

dollars as well. We learned how to record transactions using the accounting equation

in our first chapter. Our second chapter then said, " well let's not use the accounting equation anymore. Let's go ahead and use T accounts."

And so what we were doing is drawing a T account under each of our asset accounts,

for example, our cash account had a T account and our supplies account

had a T account, our accounts payable

account had a T account.

All of our Owner's Equity accounts, including the owner's capital account, had a T account.

Our withdrawals account had a T account, etc.

Well, we are going to continue to think of accounts

just as we do here, but we're not going to record transactions

originally into T accounts. Instead what we're going to do is