Definition
The foundation of accounting: every transaction affects at least two accounts, and total debits always equal total credits. It keeps the accounting equation in balance.
D
Double-Entry Accounting
Related Terms
Accounting Equation
The foundation of all accounting: Assets = Liabilities + Equity. Think of it as a balance scale. The left side (what you own) must always equal the right side (what you owe plus what owners have invested).
Credit
An entry on the right side of a T-account. Increases liabilities, equity, and revenues; decreases assets and expenses. Think of it as the "right" thing for those account types.
Debit
An entry on the left side of a T-account. Increases assets and expenses; decreases liabilities, equity, and revenues.
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