Explain the terms debit and credit. In your discussion, also present the debit and credit rules that are critical for maintaining T-accounts, as well as the equality of the balance sheet
Accountants use two abbreviations: debit (Dr.) and credit (Cr.). Debit, used as a verb, means "record an entry on the left side of an account.". Used as a noun or an adjective, it means "an entry on the left side of an account.". Credit, used as a verb, means "record an entry on
the right side of an account.". Used as a noun or an adjective, it means "an entry on the right
side of an account.". These terms combined with the three rules for T-accounts result in the following:
* A debit or charge indicates (1) an increase in an asset, or (2) a decrease in a liability, or
(3) a decrease in a shareholders' equity item.
* A credit indicates (1) a decrease in an asset, or (2) an increase in a liability, or (3) an
increase in a shareholders' equity item.
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