Accounting T-Chart

Accounting is a professional practice responsible for the financial oversight of account management, bookkeeping, budgeting, financial analysis, and tax reporting. A student studying toward a degree in accounting, is later eligible to pursue a professional accreditation as a CPA (certified public accountant) after graduation. Accounting practice leaders are qualified to oversee audit preparation with both internal and external accounting recording. Students enrolling in a degree program with a designation in accounting must demonstrate higher mathematical proficiency to exhibit proper quantitative skills for performing accounting equations and financial statement analysis (i.e. ratios). The regulatory aspects of accounting practice are also required for CPA exam preparation. Tutors at 24HourAnswers are qualified subject matter experts in accounting. Our tutors assist students with knowledge acquisition toward completion of their accounting coursework and accreditation objectives.

Here are some insights into the field of Accounting on the topic of ‘Accounting T-Chart.’

In the field of accountancy, the bookkeeping journal entry use of ledger techniques involves what is referred to as the “T account” or “T Chart.” The total balance of the “T” account appearing at the bottom of the record is summary of a single transaction within the bookkeeping ledger.

Denoting the demonstration of accounting journal ledger detail, the “T” is a double-entry account record. The T-Chart exhibits a debit to the left of the center line, and a credit to the right of the record. The double-entry method itemizes transactions based on the account category (i.e., Asset, Liability, Equity, etc.) and its disposition within the record.

Asset

 

Liability

 

Equity

 

Debit

Credit

Debit

Credit

Debit

Credit

+

-

-

+

-

+

Demonstrating transactions within the accounts receivable, inventory, PP&E, cash, and other asset accounts depict a debit increase to the left side of the T-Chart and decrease on the right side of the same ledger account. Conversely, record of liabilities and equity accounts exhibit a decrease to the debit side of the account and increase to the credit side of the account. T-Charts are also used in the reporting of income statement account items (i.e. revenue, expense, profit, loss).   

Revenue/Profit

 

Expense/Loss

Debit

Credit

 

Debit

Credit

-

+

 

+

-

In business accounting practice, multiple T-Chart account records are used to delineate individual transactions within a firm’s accounting system, including subsidiary accounts of individual credit record. Journal ledger T accounts are therefore a useful method for tracking a range of complex transactional activities a business performs during a period. 

The Chart of Accounts

Showing a list of each account within the general ledger of an accounting system, the chart of accounts applies the T-Chart in the recording of accounts. The chart of accounts affects the trial balance within the periodic reporting of a company’s accounting record, as well as active items (i.e., accounts receivable). The method requires maintenance of a list of account numbers and names corresponding with each transaction detail of the accounts, but does not include other account information (i.e., balances, debits, and credits) found in the trial balance.

A chart of accounts is a folio accounting record of the flow of transactions. The chart of accounts folio record is construed according to a unique numbering system of independently assigned prefixed numbers (i.e. Assets: 1-01) The prefix listing of the numbering system is assigned to the categorical grouping of accounts (i.e. assets, liabilities, equity, income, expenses, etc.) within the bookkeeping record. The numbering system is a useful differentiation of accounts within a company’s ledger, and preparation of the audited financial statement in the future.

The T-Chart is well-suited to the chart of accounts numbering system, offering a quick and simple method of recording a range of transactions and events that have the potential to impact a company. T-accounts are not, however, as useful for large-sized firm accounting recording, as the technique is an internal practice not vital for regulated financial reporting.  Rather, a T-Chart is a useful communication tool that allows for exhibition and narrative of individual transactions within the running balance ledger of a company’s bookkeeping record.

Example of a T-Account

In the following example the T-Chart is used to record an invoiced transaction performed between a landlord and commercial tenant.  In July, the commercial tenant, a merchant received a rent payment invoice for $15,000. The T account exhibits a debit of $15,000 assigned as “rental expense” within the ledger account, and a correspondent credit of $15,000 within the accounts payable record.  The T-Chart transaction record shows the commercial tenant has incurred an expense, as well as a liability coinciding with the payment of the rent. On payment of the rent, the accounts payable liability is eliminated and replaced with a debit to the account, and a corresponding credit to the cash (asset) account record of the ledger, thus decreasing the total balance of the account.

 

 

Expense

 

 

 

 

Accounts Payable

 

Debit

 

Credit

 

 

Debit

 

Credit

 

Date

Amt

Date

Amt

 

Date

Amt

Date

Amt

8/1/2020

$15,000.00

       

 

8/1/2020

$15,000.00

 

 

       

 

   
 

 

       

 

   

 

 

 

 

 

 

 

 

 

Bal $15,000.00

         

Bal $15,000.00

                 

 

Accounts Payable

 

 

 

 Cash

 

 

Debit

 

Credit

 

 

Debit

 

Credit

 

Date

Amt

Date

Amt

 

Date

Amt

Date

Amt

8/1/2020

$15,000.00

       

 

8/1/2020

$15,000.00

 

 

       

 

   
 

 

       

 

   

 

 

 

 

 

 

 

 

 

Bal $15,000.00

         

Bal $15,000.00

  

The Contra Account

An extension of the T-Chart concept, the contra account or “opposite” composition of the accounting record offers a more detailed description of banking and other capital transactions. As with the T account, with each journal entry transaction record, there are two accounts affected simultaneously. Therefore, capital transactions not only affect the bank record, but also the contra account and its Balance c/f and Balance b/f closing balance.

 

Debit

 

 

Bank

 

 

Credit

2020

 

 

$

2020

 

$

1-Jul

Balance

 

5,300

9-Jul

Equipment

13,000

2-Jul

Capital

 

15,000

15-Jul

Supplies

500

7-Jul

Loan

 

5,000

20-Jul

Salaries

4000

18-Jul

Services Rendered

10,500

2-Aug

Creditors

200

22-Jul

Debtors

 

5,000

2-Aug

Loan

4000

     

 $  40,800.00

12-Aug

Balance c/f

19,100

Balance  b/f

 

 $  19,100.00

   

 $  40,800.00

The T account allows for “at-a-glance” determination of the account balance. The bank account above exhibits the closing balance. The Balance b/f is the debit balance, the actual closing balance of the bank account. In the example, Balance b/f is greater than the credit side. The Balance c/f entry is used in calculating the closing balance on the debit side.

To fulfill our tutoring mission of online education, our college homework help and online tutoring centers are standing by 24/7, ready to assist college students who need homework help with all aspects of accounting, including accounting T-chart. Our business tutors can help with all your projects, large or small, and we challenge you to find better accounting tutoring anywhere.

Bibliography

“Balancing T Accounts.” Accounting Basics for Students nd.

“Chart of Accounts.” My Accounting Course nd

“T Accounts.” PrinciplesofAccounting.com nd

“T Accounts Guide: A Guide to Understanding T Accounts.” Corporate Finance Institute. 

“What is a T Account.” AccountingTools 12 Dec 2020. 

Get College Homework Help.

Are you sure you don't want to upload any files?

Fast tutor response requires as much info as possible.

Decision:
Upload a file
Continue without uploading

SUBMIT YOUR HOMEWORK
We couldn't find that subject.
Please select the best match from the list below.
For faster response, you may skip assigning directly to a tutor to receive the first tutor available.
That tutor may not be available for several hours. Please try another tutor if you're in a hurry.

We'll send you an email right away. If it's not in your inbox, check your spam folder.

  • 1
  • 2
  • 3
Get help from a qualified tutor

Latest News

Read All News
April 20, 2021

New subject available! Quantitative Methods

Hey students!  24HourAnswers.com is proud to annouce that we've added another topic to our Business subject area. You can now receive online tutoring for Quantitative Methods. You can learn more about Quantitative Methods at https://www.24houranswers.com/subjects/Business/Quantitative-Methods.   -24HourAnswers team
READ MORE
April 12, 2021

$500 College Scholarship Deadline

Just a reminder to our students and website visitors that the deadline for the Spring semester scholarship is May 1st. To learn more about applying, please visit our blog.  https://www.24houranswers.com/blog/75/24HourAnswers-500-Scholarship  
READ MORE
Live Chats