Everything Stops For T-Accounts #JusJoJan

One of the requirements for all business administration students is accounting. Whether you plan on majoring or accounting or not, you have to learn accounting, because that’s the language of business. I took a course in finance, and the professor (who was an older man) would start each class by drawing a big letter T on the board, and on the left side of the vertical line he’d write “assets” and on the other side write “finance.” Then he’d point at the left side and say “this is what you have,” then at the right side “and this is how you paid for them.”

Mr. T

T-accounts are a big deal in accounting. They’re useful for demonstrating the effect a transaction will have on a business’s accounts. There’s a good example in this video.

All of which probably gave you a headache. Sorry about that. The point is, in accounting, everything has to balance. Every transaction has two sides, and will affect a minimum of two accounts. The left side of the T has to match the right side of the T.

I worked with accounting software most of my career, so it helped to know all of this.

Today’s prompt, “balance,” was supplied by JP the Wide-Eyed Wanderer. Now here’s Rod Serling for the 1971 Ford LTD. Ford gives you better ideas!

13 thoughts on “Everything Stops For T-Accounts #JusJoJan

  1. I’m not an accountant but this makes sense. I am a credit counsellor so I do see a lot of topsy turvy when it comes to debt with a lot more on the debt side and much less on the income side

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    1. Adding and subtracting are pretty much all you have to do with bookkeeping. There’s a little calculating percentages and interest, but that’s about it. That, and making sure the left side matches the right, which is where t-accounts come in handy.

      Liked by 1 person

  2. Accounting instructor: Your accounts don’t balance.
    Student: But they are only off by a penny.
    [After studying the accounts]
    Accounting instructor: Uh-huh, you’re $1,000,000.00 off on one side and $1,000,000.01 on the other.

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