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Transactions occur in the normal course of business and are recorded. Transactions affect both sides of the accounting equation.
Transactions are recorded into accounts known as "T Accounts." This is because the increases and decreases in the account amounts are listed in a T structure. In a T structure, the left side is considered the debit side, and the right side is considered the credit side. Figure E-2 summarizes the T structure of Asset, Liability, and Owners' Equity accounts.
Figure E-2: T Accounts
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