In books devoted to accountancy you can find T accounts generated by computer software that serve as a tool to show transactions. Let's say cash has been paid to the bank.On debit side of bank account there is date of transaction, amount plus name of corresponding account.
When you practice at home using scrape paper and pen to draw T accounts, do you also write the name of corresponding account when you make entries or you just insert only date and amount when you make entries ?
if you watch this clip at 1min 6sec this person after T accounts are drawn manually puts only numbers when making entries. Is it proper way to do it ?
https://www.youtube.com/watch?v=D2qPk6-erQk
-- Edited by rafapak on Sunday 20th of December 2015 09:13:53 PM
Very seldom use T accounts and when I do its normally in Excel so that it automatically totals and balances (something missed out on the T accounts in that video).... I know, I'm just lazy but if you can get Excel to do it for you why do it yourself.
If I needed to identify entries I would put in the dates and accounts but really when you are doing T accounts you're really doing them for yourself.
The key is that if you are doing them for an exam then enter everything to make the examiners life easier.
If you are writing a book then the reader needs to understand what you are doing so you include everything.
If you are just doing them for your own amusement then if you understand what belongs where then it doesn't really matter if you include the additional details.
For starters begin including everything but when you are more confident just include the minimum. (soon enough you won't be doing them at all as software has really superseded the need for T accounts)
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
thanks Shaun for reply. This lady does good job when she does T accounts at about 10 min www.youtube.com/watch
'The key is that if you are doing them for an exam then enter everything to make the examiners life easier.' Is there any chance Shawn that you can paste T account from excell with everything entered so that I get the idea what it looks like ?
-- Edited by rafapak on Sunday 20th of December 2015 11:20:55 PM
Send me a PM and I'll reply with an old scratch spreadsheet from playing around doing AAT units 1 to 4 (back in 2010) as an attachment in the reply, that way you'll also get the formulae that I use.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
"if you watch this clip at 1min 6sec this person after T accounts are drawn manually puts only numbers when making entries. Is it proper way to do it ?"
If you listen closely to what the narrator says, then just after that point in the video you'll hear "...and all of the T accounts in this ledger contain the same numbers, the same debits and credits as what are included in the journal. The only difference is this is a very nice pictorial version."
In other words, it's been done like that for the purposes of the video - probably so they can show the viewer a single page with all the T-accounts shown on it and all readable.
What might help you is if you find an old book on accountancy - one that largely predates computerised accounting. These will probably show you well written (or well typed - they're in books) T-Accounts. They formed the central ledger in old-style record keeping (in those companies that did anything more than keep a cashbook), as well as the sales and purchase ledgers.
You'd typically have a page for each nominal (or customer, or supplier) account, and a column each for the date, the detail (and/or to cross reference to an account in another ledger), then the essential T-part; the debit and credit columns.
These days, with everything done in software in most cases, as Shaun suggests, they are probably seldom used in the real world. I suspect their most common use is in training.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
The reply to your original message was sent just after midnight so if you haven't got it yet have a look in your spam filter. I've forwarded last nights message again, this time to your other email address.
assuming that for some reason you are not receiving my emails I've posted here to let you know know the emails have been sent.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
