What Is T Accounts In Accounting

The T account is a good place to begin the study of the double-entry system. Such an account has the following three parts:
■■ a title, which identifies the asset, liability, or owner’s equity account
■■ a left side, which is called the debit side
■■ a right side, which is called the credit side
The T account, so called because it resembles the letter T, is a tool used to analyze transactions and is not part of the accounting records. It looks like this:
Title of Account

Any entry made on the left side of the account is a debit, and any entry made on the
right side is a credit. The terms debit (abbreviated Dr., from the Latin debere) and credit
(abbreviated Cr., from the Latin credere) are simply the accountant’s words for “left”
and “right” (not for “increase” or “decrease”). We present a more formal version of the
T account, the ledger account form, later in this chapter.
the t Account illustrated Suppose a company had several transactions during the
month that involved the receipt or payment of cash. These transactions can be summarized in the Cash account by recording receipts on the left (debit) side of a T account
and payments on the right (credit) side.
Cash

The cash receipts on the left total $103,000. (The total is written in smaller, blue figures
so that it cannot be confused with an actual debit entry.) The cash payments on the right
side total $71,600. These totals are simply working totals, or footings. Footings, which
are calculated at the end of each month, are an easy way to determine cash on hand.
The difference between the total debit footing and the total credit footing is called the
account balance (or balance). If the balance is a debit, it is written on the left side. If it
is a credit, it is written on the right side. Notice that the Cash account has a debit balance of $31,400 ($103,000 – $71,600). This is the amount of cash the business has on hand at the end of the month