Debits and credits

debitcreditdebit and creditcreditscontra accountchargedebit (and/or credit)debitsT' accountT-account
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value resulting from business transactions.wikipedia
95 Related Articles

Ledger

ledgersledger bookaccount book
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value resulting from business transactions.
A ledger is the principal book or computer file for recording and totaling economic transactions measured in terms of a monetary unit of account by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account.

Account (bookkeeping)

accountaccountsaccompts
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value resulting from business transactions.
In bookkeeping, an account refers to assets, liabilities, income, expenses, and equity, as represented by individual ledger pages, to which changes in value are chronologically recorded with debit and credit entries.

Double-entry bookkeeping system

double-entry bookkeepingdouble-entry accountingdouble entry bookkeeping
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value resulting from business transactions. The first known recorded use of the terms is Venetian Luca Pacioli's 1494 work, Summa de Arithmetica, Geometria, Proportioni et Proportionalita (translated: Everything That Is Known About Arithmetic, Geometry, Proportions and Proportionality). Pacioli devoted one section of his book to documenting and describing the double-entry bookkeeping system in use during the Renaissance by Venetian merchants, traders and bankers.
The double entry has two equal and corresponding sides known as debit and credit.

Trial balance

balances
For the company as a whole, the net position of every account (debit or credit) is shown in the trial balance report.
The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column.

Bank account

bank accountsaccountaccounts
This is because most people typically only see bank accounts and billing statements (e.g., from a utility).
Bank accounts may have a positive, or credit balance, where the financial institution owes money to the customer; or a negative, or debit balance, where the customer owes the financial institution money.

Accounting equation

assets minus liabilities equals owners' equityliabilities
In accounting terms, assets are recorded on the left-hand side (debit) of asset accounts, because they are typically shown on the left-hand side of the accounting equation (A=L+SE). Likewise, an increase in liabilities and shareholder’s equity are recorded on the right-hand side (credit) of those accounts, thus they also maintain the balance of the accounting equation.
This equation is behind debits, credits, and journal entries.

Accounts receivable

receivablereceivablesaccounts receivables
This is because the customer's account is one of the utility's accounts receivable, which are Assets to the utility because they represent money the utility can expect to receive from the customer in the future.
Since not all customer debts will be collected, businesses typically estimate the amount of and then record an allowance for doubtful accounts which appears on the balance sheet as a contra account that offsets total accounts receivable.

Financial transaction

transactiontransactionsfinancial transactions
Debits and credits occur simultaneously in every financial transaction in double-entry bookkeeping.
Using this card, the seller is able to send an electronic signal to the buyer's bank for the amount of the purchase, and that amount of money is simultaneously debited from the customer's account and credited to the account of the seller.

Expense

expensesexpenditurebusiness expense
All accounts must first be classified as one of the five types of accounts (accounting elements) ( asset, liability, equity, income and expense).
In double-entry bookkeeping, expenses are recorded as a debit to an expense account (an income statement account) and a credit to either an asset account or a liability account, which are balance sheet accounts.

Liability (financial accounting)

liabilitiesliabilitydebt
All accounts must first be classified as one of the five types of accounts (accounting elements) ( asset, liability, equity, income and expense).
A debit either increases an asset or decreases a liability; a credit either decreases an asset or increases a liability.

General journal

journalJournalsrecord
The above example can be written in journal form:
The journal is where double entry bookkeeping entries are recorded by debiting one or more accounts and crediting another one or more accounts with the same total amount.

General ledger

ledgersaccountsclosing the books
General ledger is the term for the comprehensive collection of T-accounts (it is so called because there was a pre-printed vertical line in the middle of each ledger page and a horizontal line at the top of each ledger page, like a large letter T). Before the advent of computerised accounting, manual accounting procedure used a book (known as a ledger) for each T-account.
The purpose of the trial balance is, at a preliminary stage of the financial statement preparation process, to ensure the equality of the total debits and credits.

Bad debt

allowance for bad debtsAllowance for Doubtful Accountsbad
Examples are accumulated depreciation against equipment, and allowance for bad debts (also known as allowance for doubtful accounts) against accounts receivable.
Also known as a bad debt reserve, this is a contra account listed within the current asset section of the balance sheet.

Depreciation

depreciateddepreciateaccumulated depreciation
Examples are accumulated depreciation against equipment, and allowance for bad debts (also known as allowance for doubtful accounts) against accounts receivable.
Accumulated depreciation is known as a contra account, because it separately shows a negative amount that is directly associated with another account.

Value (economics)

valueeconomic valuemonetary value
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respectively) are entries made in account ledgers to record changes in value resulting from business transactions.

Accountant

accountantspublic accountingaccountancy
Accountants group accounts from the trial balance report to prepare financial statements.

Luca Pacioli

PacioliPacioli, LucaLuca Paccioli
The first known recorded use of the terms is Venetian Luca Pacioli's 1494 work, Summa de Arithmetica, Geometria, Proportioni et Proportionalita (translated: Everything That Is Known About Arithmetic, Geometry, Proportions and Proportionality). Pacioli devoted one section of his book to documenting and describing the double-entry bookkeeping system in use during the Renaissance by Venetian merchants, traders and bankers.

Summa de arithmetica

Summa de arithmetica, geometria, proportioni et proportionalitàSumma de Arithmetica, Geometria, Proportioni et ProportionalitaSumma de arithmetica, geometria, proportioni e proportionalità
The first known recorded use of the terms is Venetian Luca Pacioli's 1494 work, Summa de Arithmetica, Geometria, Proportioni et Proportionalita (translated: Everything That Is Known About Arithmetic, Geometry, Proportions and Proportionality). Pacioli devoted one section of his book to documenting and describing the double-entry bookkeeping system in use during the Renaissance by Venetian merchants, traders and bankers.

Renaissance

the Renaissanceearly RenaissanceRenaissance Europe
The first known recorded use of the terms is Venetian Luca Pacioli's 1494 work, Summa de Arithmetica, Geometria, Proportioni et Proportionalita (translated: Everything That Is Known About Arithmetic, Geometry, Proportions and Proportionality). Pacioli devoted one section of his book to documenting and describing the double-entry bookkeeping system in use during the Renaissance by Venetian merchants, traders and bankers.

Equity (finance)

equityshareholders' equityequity capital
All accounts must first be classified as one of the five types of accounts (accounting elements) ( asset, liability, equity, income and expense).

Income

earningsincomesearning power
All accounts must first be classified as one of the five types of accounts (accounting elements) ( asset, liability, equity, income and expense).

International Financial Reporting Standards

IFRSinternational financial reporting standardInternational Accounting Standards
The definition of an asset according to IFRS is as follows, "An asset is a resource controlled by the entity as a result of past events from which future economic benefits are expected to flow to the entity".

Public utility

utilitiespublic utilitiesutility
This is because most people typically only see bank accounts and billing statements (e.g., from a utility).

Debit card

debit cardsdebitcard
Debit cards and credit cards are creative terms used by the banking industry to market and identify each card.

Asset

assetstotal assetstangible asset
All accounts must first be classified as one of the five types of accounts (accounting elements) ( asset, liability, equity, income and expense). The definition of an asset according to IFRS is as follows, "An asset is a resource controlled by the entity as a result of past events from which future economic benefits are expected to flow to the entity".