THE T-ACCOUNT

Lesson 4-3
Objectives:
Analyze transactions with the
use of the debit and credit in T-
accounts
Use of T-Accounts
An Account is a form of record that summarizes the increase
or decrease 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,owners equity,revenue and expenses.

The three elements of an account are:

1.Account Title
2.Debit
3.Credit
 The T-account & the
rules of debit & credit
Account
Debit Title Credit

1. Increase in asset 1. decrease in asset

2. Decrease in liability 2. Increase in liability
3. Decrease in owners 3. Increase in owners equity
equity (withdrawals (investment,additional
and expenses) investment,revenue/income)
May 2 Gisel Ong opened Anime World Gallery. She
invested P300,000 in this initial endeavor.
Rules Debit increase in assets. Credit increases in owners
equity.

Cash Ong,
5/2 300,000 Capital
5/2 300,000
May 3 Gisel Ong issued a promissory note for a P100,000 loan
from Allay Bank. The note carriers a 12% interest per
annum. The interest and the principal are payable after one
year.
Rules Debit increase 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 P180,000 in cash.

Rules Debit increase in assets. Credit increases 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 Blooms costing P40,000,
paying P12,000 and the balance at the end of the month. (Note: A
compound entry is needed in this transaction.)

Rules Debit increase in assets. Credit decreases in assets.

Credit increase in liabilities.

Cash Fur. & Fix

5/2 300,000 5/5 180,000 5/5 40,000
5/3 100,000 5/5 12,000

Accnts. Payable
5/5 28,000
May 6 Gisel Ong rented office space and pais two
months rent in advance, all costing P18,000
Rules Debit increase in assets. Credit decreases in assets.

Prepaid Notes Payable

Rent
5/6 18,000 5/2 300,000 5/5 180,000
5/3 100,000 5/5 12,000
5/6 18,000
May 7 Ms. Ong paid Asia Insurance Co. P10,800 for
one year insurance of the gallery.

Rules Debit increase in assets. Credit decreases in assets.

Prepaid Notes Payable

Insurance
5/7 10,800 5/2 300,000 5/5 180,000
5/3 100,000 5/5 12,000
5/6 18,000
5/7 10,800
May 8 The P7,200 worth of art supplies ordered from
National Book Store were delivered on account.
Rules Debit increase in assets. Credit increases in
liabilities.

Art Accnts. Payable

5/8 7,200Supplies 5/5 28,000
5/8 7,200
May 11 An oil painting of Naruto and acrylic painting of L was delivered
to Mr. Ku To. Gisel Ong billed Mr. Ku To P120,000 for the paitings
delivered.
Rules Debit increase in assets. Credit increases in assets.

Accnts. Receivable Painting

5/11 120,000 Revenue5/11 120,000
May 12 Ms. Ong paid National Book Store P3,000 of
the amount owed.
Rules Debit decrease in liabilities. Credit decreases in
assets.

Cash Accnts. Payable

5/2 300,000 5/5 18,000 5/12 3,000 5/5 28,000
5/3 100,000 5/5 12,200 5/8 7,200
5/6 18,000
5/7 10,800
5/12 3,000
May 15 Received P50,000 from Mr. Ku To as partial
payment for the anime painting deliverd last May 11.

Rules Debit increase in assets. Credit decreases in

assets.

Cash Accnts.
5/2 300,000 5/5 18,000 Receivable
5/11 120,000 5/15 50,000
5/3 100,000 5/5 12,200
5/15 50,000 5/6 18,000
5/7 10,800
5/12 3,000
May 18 Gisel Ong withdrew P18,000 for personal
use.
Rules Debit decrease in owners equity. Credit decreases
in assets.

Cash Ong, Drawing

5/2 300,000 5/5 18,000 5/18 18,000
5/3 100,000 5/5 12,200
5/15 50,000 5/6 18,000
5/7 10,800
5/12 3,000
May 20 Ms. Ong received P80,000 for personal
a contract to paint Lelouch.
Rules Debit decrease in assets. Credit decreases in
liabilities.

Cash Ong, Drawing

5/2 300,000 5/5 18,000 5/20 80,000
5/3 100,000 5/5 12,200
5/15 50,000 5/6 18,000
5/7 10,800
5/12 3,000
5/18 18,000
May 23 Gisel Ong received cash from Ms. Uto San,
P90,000, for a charcoal poster of Kirito.
Rules Debit increase in assets. Credit increases in owners
equity.
Cash Painting
5/2 300,000 5/5 18,000 Revenue5/11 120,000
5/3 100,000 5/5 12,200 5/23 90,000
5/15 50,000 5/6 18,000
5/20 80,000 5/7 10,800
5/23 90,000 5/12 3,000
5/18 18,000
May 25 Ms. Ong paid helpers salary for the month,
P4,000.
Rules Debit decrease in owners equity. Credit decreases
in assets.
Cash Salaries Expense
5/2 300,000 5/5 18,000 5/25 4,000
5/3 100,000 5/5 12,200
5/15 50,000 5/6 18,000
5/20 80,000 5/7 10,800
5/23 90,000 5/12 3,000
5/18 18,000
5/25 4,000
May 29 Gisel Ong paid water bill of P540
for the month.
Rules Debit decrease in owners equity. Credit decreases
in assets.
Cash Utilities Expense
5/2 300,000 5/5 18,000 5/29 540
5/3 100,000 5/5 12,200
5/15 50,000 5/6 18,000
5/20 80,000 5/7 10,800
5/23 90,000 5/12 3,000
5/18 18,000
5/25 4,000
5/29 540
May 30 Ms. Ong received bill from Meralco
amounting to P4,500.
Rules Debit decrease in owners equity. Credit increases in
liabilities.
Utilities Utilities Payable
Expense
5/29 540 5/30 4,500
5/30 4,500