Accounting Tutorial

3. Setup Balance Sheet

Using the Trial Balance, the Balance Sheet consists of:
Assets, Liabilities, Capital and Retained Earnings accounts.

At this time you make decisions about numbering the accounts. Plan the numbers well. Allow at least 10 between accounts to allow for inserting new accounts and grouping accounts which relate to each other.

Account Numbering

 Numbering  Account Type  Normal Balance
 100īs or 1000īs  Assets  Debit (DR)
 200's or 2000's  Liability  Credit (CR)
 300īs or 3000īs  Capital  Credit (CR)

Setting up Account Numbers - Sample

Based on the Fundamental Accounting Equation: Assets = Liability + Capital.

 Number  Account  DR  CR
 1000  Cash  50.00  
 1100  Bank  1500.00  
 1200  Office Equipment  2500.00  
 1300  Inventory  200.00  
 1400  Accounts Receivable  200.00  
 2000  Accounts Payable    300.00
 2100  VISA Payable    0.00
 2200  Taxes Payable    100.00
 3000  Owner Equity    4050.00
 3050  Owner Withdrawal    0.00
 3100  Retained Earnings    0.00
   Totals DR/CR  4450.00  4450.00