AccountingBLOCK - Accounting Forums - View Single Post - Debit Credit Newbie question about T-Accounts

04-30-2008, 04:05 AM

Cash is a cuurent Assets. Every Assets will have debit balance, which means the balance brought down is on the debit side.

If the company Sold anything for Cash . The cash will increase. So it will have to record in the debit side of the cash book.

1) For Example if the company sold it's fixed asset, for example a computer for $1000 than the journal entry for this transection is

DR... Cash
CR... Computer or Fixed assets

In T accounts this transection will record like i mention in below

T- Cash
dr________________________cr_
Computer 1000|

T- Computer
dr________________________cr__
|Cash 1000

If the company purchase anything paying by cash that means the company is loosing cash, so that the cash will decrease because they are paying buy cash. So that the cash account sould be Credited.

2) For an example the company buy A new fixed asset for $2000 ,paying by cash. Than the journal entry for this is

DR... Fixed assets a/c
CR... Cash a/c

In the T accounts this transection will be recorded in the following way..

T- Fixed Assets
dr____________________________cr
Cash 2000 |

T- Cash
dr____________________________cr
|Fixed assets 2000

This is how the cash Purchase and Cash sales are to be recorded.

Lets assume that the both the transection 1 and 2 are occurd in th same year in the same company.
So lets record this two trasnection in the accounts

Lets assume that the Company has a cash balance of $4680 and Fixed Assets balance of $16000

T - Cash
dr______________________________________cr
Balance b/d 4680 |
|
Fixed Assets 1000 | Fixed Assets 2000
|
| Balance c/f 3680
_____ | ______
5680 | 5680
==== | ======
Balance b/f 3680 |

T - Fixed Assets
dr______________________________________cr
Balance b/d 16000 |
|
Cash 2000 | Cash 1000
|
|Balance c/f 17000
______ | _______
18000 | 18000
=====| ======
Balance b/f 17000 |

Why i have writtent all the balances in debit side is that these two accounts are related to Assets and every Assets have debit balances.

I think this will be enough for your question..

Thank you...

04-30-2008, 04:05 AM	#2 (permalink)
Malax03 Posts: n/a Credits: 0	Sollution for the Question, why cash is debiting or crediting? Cash is a cuurent Assets. Every Assets will have debit balance, which means the balance brought down is on the debit side. If the company Sold anything for Cash . The cash will increase. So it will have to record in the debit side of the cash book. 1) For Example if the company sold it's fixed asset, for example a computer for $1000 than the journal entry for this transection is DR... Cash CR... Computer or Fixed assets In T accounts this transection will record like i mention in below T- Cash dr________________________cr_ Computer 1000\| T- Computer dr________________________cr__ \|Cash 1000 If the company purchase anything paying by cash that means the company is loosing cash, so that the cash will decrease because they are paying buy cash. So that the cash account sould be Credited. 2) For an example the company buy A new fixed asset for $2000 ,paying by cash. Than the journal entry for this is DR... Fixed assets a/c CR... Cash a/c In the T accounts this transection will be recorded in the following way.. T- Fixed Assets dr____________________________cr Cash 2000 \| T- Cash dr____________________________cr \|Fixed assets 2000 This is how the cash Purchase and Cash sales are to be recorded. Lets assume that the both the transection 1 and 2 are occurd in th same year in the same company. So lets record this two trasnection in the accounts Lets assume that the Company has a cash balance of $4680 and Fixed Assets balance of $16000 T - Cash dr______________________________________cr Balance b/d 4680 \| \| Fixed Assets 1000 \| Fixed Assets 2000 \| \| Balance c/f 3680 _____ \| ______ 5680 \| 5680 ==== \| ====== Balance b/f 3680 \| T - Fixed Assets dr______________________________________cr Balance b/d 16000 \| \| Cash 2000 \| Cash 1000 \| \|Balance c/f 17000 ______ \| _______ 18000 \| 18000 =====\| ====== Balance b/f 17000 \| Why i have writtent all the balances in debit side is that these two accounts are related to Assets and every Assets have debit balances. I think this will be enough for your question.. Thank you...