Debits and credits

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"Debit" redirects here. For the Dalmatian grape variety, see Debit (grape). For
the Italian grape variety, see Bombino bianco.
Not to be confused with Debt.
In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respecti
vely) are entries made in account ledgers to record changes in value resulting f
rom business transactions. Generally speaking, the source account for the transa
ction is credited (an entry is made on the right side of the account's ledger) a
nd the destination account is debited (an entry is made on the left side). Indiv
idual transactions may require multiple debit and credit entries to record, and
total debits must equal total credits for each transaction.[1][2]
The difference between the total debits and total credits in a single account is
the account's balance. If debits exceed credits, the account has a debit balanc
e; if credits exceed debits, the account has a credit balance.[3] For the compan
y as a whole, the totals of debit balances and credit balances must be equal as
shown in the trial balance report, otherwise an error has occurred.
Accountants use the trial balance to prepare financial statements (such as the b
alance sheet and income statement) which communicate information about the compa
ny's financial activities in a generally accepted standardized format.