This t-account template helps you organize and balance the debits and credits for your transactions and journal entries. Use this template to visualize the accounting perspective of how transactions affect a business’ different accounts.
Here is a preview of what the t-account template looks like:
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T-Accounts are a graphical representation of individual accounts on a company’s ledger. They are shaped like a ‘T’ to help visualize how transactions, debits, and credits affect a company’s accounts. By graphically showing the debits and credits, t-accounts help determine what type of account each individual item is and how a transaction changes its balance.
For example, by looking at the t-account template preview above, you can see an asset account and a liability account. You will notice that asset accounts primarily hold a balance on the left of the t-account. Conversely, liability accounts hold a balance on the right. This is because asset accounts hold a debit balance while liability accounts maintain a credit balance. Building on this example, we can look at how a transaction would affect an asset account and liability account. Consider a transaction where the company purchases $1,000 of equipment on credit. This would affect the above t-accounts like so:
As you can see, the equipment account is an asset account so the balance is depicted on the left as a debit balance. Conversely, the accounts payable account is a liability account so the balance is shown on the right. Using t-accounts is a great way to understand and keep track of journal entries! Use CFI’s t-account template to make this even easier!
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