1. In-Class Exercise: Complete Exercise E3-7A, E3-7B (10 minutes each)–SHOW ME WHEN YOU ARE DONE–KEEP THIS!!

Chapter 3

The Double-Entry Framework

Learning Objectives

  • LO1    Define the parts of a T account.
  • LO2    Foot and balance a T account.
  • LO3    Describe the effects of debits and credits on specific types of accounts.
  • LO4    Use T accounts to analyze transactions.
  • LO5    Prepare a trial balance and explain the purpose and link with the financial statements.


  1. The Trial Balance (See Figure 3-22)
    1. Is prepared periodically to determine the equality of the debits and the credits.
    2. Is a list of all accounts showing the title and balance of each account.
    3. Provides proof that the:
      1. The sum total of the debits equals the sum total of the credits.
      2. The accounting equation has remained in balance.
  2. The totals for the trial balance are not the same as those for the accounting equation. The trial balance compares the sum of all accounts with debit balances (assets, drawing, and expenses) with those with credit balances (liabilities, owner’s equity, and revenue). The accounting equation compares the sum of the asset accounts with the sum of the liabilities and owner’s equity accounts using the expanded equation (Assets = Liabilities + Capital – Drawing + Revenue – Expenses).
  3. On financial statements, single underlines are used for amounts to be summed. Double underlines are used for totals.
  4. Dollar signs are not used on the trial balance.Dollar signs are used on financial statements at the top of each column and for the first amount entered in a column beneath an underline.
  7. In-Class Exercise: Complete Exercise E3-8A, E3-8B (10 minutes each)–USE EXCEL TO DO THIS–SHOW ME WHEN YOU ARE DONE
  8. In-Class Exercise: Complete Exercise E3-9A, E3-9B (10 minutes each)–USE EXCEL TO DO THIS–SHOW ME WHEN YOU ARE DONE