I don't understand how this works. Can somebody explain it to me in steps, in a clear way?
Set up your "T" account.
If there is cash or bank in the question, you put that as your balance brought down on the Dr side.
List all of your receipts on the debit side making no adjustments.
List all of your payments on the Cr side making no adjustments.
Balance the account: add up both sides and put the bigger number under each side. Take the smaller side from the bigger side and write the difference on the smaller side as "Balance c/d". Write the balance under the larger side then as your new "Balance b/d".