what is debit and credit in accounting
Debit and Credit Debit means left and credit means right. “Debit” is abbreviated as “Dr” and “Credit” as “Cr”. The terms originated from the Latin terms “debere” or “debitum” which means “what is due”, and “credere” or “creditum” which means “something entrusted or loaned”. Debit indicates that an amount should be entered on the left […]
Basic Accounting Equation for Beginners
What is Accounting Equation? The accounting equation is considered to be the base for the double-entry system of bookkeeping. A company’s balance sheet shows that a company’s total assets are equal to the sum of the company’s liabilities and shareholders’ equity. The financial position of a company is measured by the following items: Assets (what it […]
Types of Accounts
Accounts are classified into 3 categories, they are: Personal Account Real Account Nominal Account Personal Account Personal Accounts are related to individuals, firms, companies, etc. Example: Debtor, Creditor, Banks, Outstanding account, prepaid accounts, accounts of customers, accounts of goods suppliers, capital, drawings, etc. The Golden rule for a Personal account is Debit the receiver of […]