Free Accounting Tutorials


These accounting tutorials, written by an accounting tutor and retired Professor of Accounting are great learning tools that will help you understand each topic. You should read the related chapter in your financial accounting textbook and attempt some exercises. When you come to a stumbling block, just click on the accounting tutorial that covers your problem area.

They are easy to use. Each accounting tutorial shows you step by step how to get through a typical problem. All you have to do is click your mouse and you move through the tutorial. Go through them as fast or as slow as you want. You are in control.


THE ACCOUNTING CYCLE

The accounting cycle includes analyzing, recording and posting transactions, preparing a trial balance, making adjusting entries and preparing closing entries. Before you can record a transaction, you must have an idea of how we increase and decrease the accounts. We start out with the tabular (horizontal) format. After a few tutorials (one or two chapters in your book), you will never use that format again. It is a learning tool. Click on the Tabular tutorial and get started.

After you have completed the Tabular Tutorial, you will have a good idea of how accounts are increased and decreased simply with plusses and minuses. The Normal Balances Tutorial will discuss and illustrate normal balances of accounts and the use of debits and credits. In this tutorial, you will be shown the rules for debits and credits. At the completion, you will be able to increase and decrease accounts using debits and credits instead of plusses and minuses. Test yourself. Take the normal balance test. It's in the menu on the right.

The recording tutorial illustrates the steps to take to record transactions in a general journal.
A total of six transactions are illustrated.

The Posting tutorial illustrates the steps to take to post transactions from a general journal into the general ledger.

The adjusting entries tutorial illustrates six typical adjusting entries (i.e. rent, insurance supplies and unearned revenue). Your book covers the same ones. This tutorial takes you step by step through the process of analyzing the information given and making the entry for each situation.

Click on the terms for the accounting cycle to make sure you are acquainted with all the terms.

Then challenge yourself. Take the accounting cycle terminology test. See if you are ready for your class quiz or test. Go ahead. Click on it. No one will know the results but you.


Frequently Asked Questions

Q. How can I determine which accounts to debit and credit for an entry?
A. There are five questions you can ask and answer:

  1. What accounts are changing because of this transaction?
  2. What is the classification of each account?
  3. What is the normal balance of each account?
  4. Is the account increasing or decreasing?
  5. Is the account to be debited or credited?

Answer those questions and apply the rules of debits and credits for increasing/decreasing accounts and you will have the answer. This is illustrated in the Recording tutorial.

Q. What is a trial balance?
A. You recorded transactions in the general journal with equal debits and credits. You posted those entries into the accounts. You had equal debits and credits in the journal so you must have equal debits and credits in the general ledger. The trial balance is a listing of all the accounts in the ledger with balances other than zero. The trial balance should have equal debits and credits proving that you posted equal debits and credits.

Q. Why are adjustments necessary?
A. It's a timing thing. Financial statements are prepared at the end of period and in your course always at the end of a month. During the accounting period, transactions were recorded, many times creating assets. At the end of the period, we may not have the assets that are stated in our accounts. Corporations report to the public so they must change the accounts to properly state them. For instance, we increased the supplies account by making purchases during the period. We've used some of those supplies so we need to show how much. We reduce the supplies to the amount we have and at the same time show the amount we used.

Q. What happens if an adjustment isn't made?
A. Assume the adjustment to recognize the use of $1,000 of supplies was not made. The Supplies account was not reduced by the $1,000 so that asset is too high (it's overstated). If assets are overstated in the accounting equation, then something else has to be happening to make our equation balance. We failed to increase our expense account which would have reduced our net income and therefore, owner's equity. So owner's equity is overstated by the $1,000.
ASSETS = LIABILITIES + OWNER'S EQUITY
+$1,000                             +1,000

 

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