An account is a record which is used to record individual transaction.
An account basically is made up of three parts:
- A title which is the name of the item recorded in the account;
- Each account has a space for recording increases in the amount of the item and
- Each account has a space for recording decreases in the amount of the item.
The account form presented below is called a T-account because it resembles the letter T.
The left side of the account is called the debit side and the right ide is called the credit side.
The amount entered on the left side of an account regardless of the account title are called debits to the account. When debits are entered in an account, the account is said to be debited(or charged) whereas the amount entered on the right side of an account are called credits and the account is said to be credited.
Debits and credits can be abbreviated as Dr and Cr. respectively.
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