Question

How do I create a T-account for earned revenues of $60,000, with $10,000 on credit and $50,000 cash, and a $4,000 deposit from a client?

Answer 1

To create a T-account for earned revenues, you'll start by setting up the T-account format. A T-account consists of two sides: the left side (debit) and the right side (credit). Here's how to enter your transactions into the T-account for earned revenues.

### T-account for Earned Revenues

```
Earned Revenues
---------------------------------
Debit | Credit
---------------------------------
| $60,000
|
| $10,000 (from credit sales)
| $50,000 (from cash sales)
| $4,000 (deposit from a client)
```

### Explanation
1. **Total Earned Revenues**: You have total earned revenues of $60,000. Since revenues typically increase a company's equity, this amount will be recorded as a credit.

2. **Breakdown of Revenue**:
- **Credit Sales**: This part of your revenue is generated on credit, recorded as $10,000.
- **Cash Sales**: This part is in cash, recorded as $50,000.
- **Deposit from Client**: A deposit of $4,000 from a client is also considered part of your earned revenues, and this amount will also be credited, as it signifies revenue that the company has earned but will recognize in the future.

### Finalized T-account

This would make the T-account look like the following:

```
Earned Revenues
---------------------------------
Debit | Credit
---------------------------------
| $60,000
|
| $10,000 (credit sales)
| $50,000 (cash sales)
| $4,000 (client deposit)
```

In a typical accounting entry for a complete view, you might combine these in the credit column if looking to summarize or see total earned revenues:

```
Earned Revenues
---------------------------------
Debit | Credit
---------------------------------
| $60,000 (total earned revenues)
```

That’s how you set up the T-account for earned revenues!