T-account

What Is a T-account?

A T-account is a financial accounting tool used to analyze and record transactions. It is called a T-account because of its T-shape, with the vertical line representing the account balance, and the horizontal line dividing the account into its two sides - the debit side on the left and the credit side on the right.

What Is the Difference Between the Debit and Credit Sides of a T-account?

The debit side of the T-account shows all the transactions that increase the account balance, while the credit side shows all the transactions that decrease it.

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