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T Account

T Account

How does one use a "T Account" in accounting?

Account T

A T-Account is actually just a way of tracking information as it is entered into the Journal. A separate T-Account can be made for each Ledger account. It consists of a title (the Ledger account name and/or number), a list of debits on the left side, and a list of credits on the right side.

T-Accounts are especially useful when tracking complex transactions. A complex transaction might be something like a company purchasing a piece of land with a building, some transportation equipment, some production equipment, and some office equipment on it. If the payment structure is complex as well, it would be easy to lose track of some of the details of the transactions. T-Accounts make it easier to see all aspects of the transactions.