T-Accounts Exercise
A T-account is an informal, visual aid used in double-entry bookkeeping to represent an individual general ledger account. It is named for its resemblance to the letter "T" and is a fundamental tool for understanding and tracking how financial transactions affect a business's accounts. 
Key components and functions:
Account Title: Written above the horizontal line (e.g., "Cash," "Accounts Payable").
Debits (DR): Recorded on the left side of the vertical line. For asset and expense accounts, debits increase the balance, while for liability, equity, and revenue accounts, they decrease the balance.
Credits (CR): Recorded on the right side of the vertical line. For liability, equity, and revenue accounts, credits increase the balance, while for asset and expense accounts, they decrease the balance.
Visualization and Balancing: T-accounts help visualize that every transaction has an equal and opposite effect (a debit and a credit) to keep the accounting equation (Assets = Liabilities + Equity) in balance. The final step is to total each side and find the difference to determine the account's ending balance. 
Cash Inventory Owner's Equity-Mia
Debit Credit Balance Debit Credit Balance Debit Credit Balance
Transactions Ref # Increase Decrease Ref # Increase Decrease Ref # Decrease Increase
Transaction 1 Investing in the Business 1     0.00 5     0.00 1     0.00 Closing Books-Entries
  Mia invests $3.00 and Leo invests $2.00 2   0.00 6   0.00 CE-1   0.00 CE -Closing Entry Increase Decrease
Transaction 2 Loan to the business 3   0.00 9   0.00 CE-2   0.00 Debit Credit
  Mia loans the business $5.00 4   0.00 10   0.00   Owner Draws-Leo 2.75
Transaction 3 Purchase of Equipment 5   0.00     Owner Draws-Mia 2.75
  Mia wrote a check for $10.00 for Equipment 6   0.00     Owner Equity-Leo 2.75
Transaction 4 Mom's Loan-Accounts Payable 7   0.00     Owner's Equity-Mia 2.75
  Mom Loans the business $6.00 8   0.00    
  Accounts Payable-Mom 9   0.00     Close Owner Draws
Transaction 5 Purchase of Inventory 10   0.00     to Owners Equity Accounts
  Mia wrote a check for $6.00 to purchase Inventory 11   0.00    
Transaction 6 Sales Day 1-$10.00 12   0.00     Sales 23.50
  Sales were $10.00 and  Cost Of Sales were $6.00 Cost Of Sales 13.00
  Cash Received was $10.00 and Inventory decreased by $6.00 Owner Equity-Leo 5.25
Transaction 7 Paying Off Debts Equipment Owner Equity-Leo Owner Equity-Leo 5.25
  Mia pays off Accounts Payable to Mom of $6.00 And Debit Credit Balance Debit Credit Balance
  Mia pays off $4.00 of her loan balance -Loans Payable-Mia. Ref # Increase Decrease Ref # Decrease Increase Transfer Profit of $10.50
Transaction 8 Mia Loan to Business 3     0.00 1     0.00 To Owner Equity Accounts
  Mia loans the business $7.00   CE-1   0.00
Transaction 9 Purchase of Inventory from Mom   CE-2   0.00 Bookkeeping closing entries are journal entries
  Mia pays Mom $7.00 for Invemtory     made at the end of an accounting period to transfer
Transaction 10 Sales Day 2-$13.50     the balances of temporary accounts 
  Sales were $13.50 and  Cost Of Sales were $7.00     (Income Statement Accounts) to permanent accounts
  ,Cash Received was $13.50 and Inventory decreased by $7.00      (Balance Sheet Accounts), effectively resetting 
Transaction 11 Paying Debts the temporary accounts to zero.
  Mia pays herself $8.00 for the Loan still owed to her.
Transaction 12 Paying Owners Accounts Payable-Mom Notes Payable-Mia Owner Draws-Leo
  The kids wat to draw out some money. Debit Credit Balance Debit Credit Balance Debit Credit Balance
  Mia pays Leo $2.75 and herself $2.75 Ref # Decrease Increase Ref # Decrease Increase Ref # Increase Decrease
   for a total cash outlay of $5.50. 4     0.00 2     0.00 12     0.00
7   0.00 7   0.00 CE-1   0.00
Closing Enties See Formal Entries in the Upper Right Corner of the Sheet   8   0.00  
CE-1 Transfer Owner Draws To Equity   11   0.00  
  Owner Equity-Leo $2.75     
  Owner Equity -Mia $2.75    
  Owner Draws-Leo -$2.75    
  Owner Draws-Mia -$2.75
CE-2 Transfer Profits of $10.50 to Owner Equity
  Sales $13.50 Sales Cost Of Sales Owner Draws-Mia
  Cost Of Sales -$13.00 Debit Credit Balance Debit Credit Balance Debit Credit Balance
  Owner Equity-Leo $5.25 Ref # Decrease Increase Ref # Increase Decrease Ref # Increase Decrease
  Owner Equity-Mia -$5.25 6     0.00 6     0.00 12     0.00
    10   0.00 10   0.00 CE-1   0.00
  Reference Formal  Closing Entry  CE-2   0.00 CE-2   0.00  
  in Upper Right Corner of this Sheet      
     
     
     
Accounting Equation (Balance Sheet Equation)
Balances after Posting Transactions Accounting Equation
Assets = Liabilities + Owner Equity
Transaction 1  Investing In Business 0.00 0.00 0.00
Transaction 2 Loan to Business-Mia 0.00 0.00 0.00
Transaction 3 Purchase Inventory 0.00 0.00 0.00
Transaction 4 Mom Loan To Business 0.00 0.00 0.00
Transaction 5 Purchase Of Inventory 0.00 0.00 0.00
Transaction 6 Day 1 Sales 0.00 0.00 0.00
Transaction 7 Pay Off Debts 0.00 0.00 0.00
Transaction 8 Loan To Business-Mia 0.00 0.00 0.00
Transaction 9 Purchase Inventory-Mom 0.00 0.00 0.00
Transaction 10 Dales Day 2 0.00 0.00 0.00
Transaction 11 Paying Debts 0.00 0.00 0.00
Transaction 12 Pay Owner Draws 0.00 0.00 0.00