In double-entry accounting, each transaction is recorded as a debit and credit where a debit in one account is offset by a credit in another account. As a result, the sum of all debits is exactly equal to the sum of all credits. This method can help business owners prepare accurate financial statements and detect errors in the company records.

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Why is debit called Dr?

The terms debit (DR) and credit (CR) have Latin roots: debit comes from the word debitum, meaning “what is due,” and credit comes from creditum, meaning “something entrusted to another or a loan.” … A decrease in liabilities is a debit, notated as “DR.”

Author: David Paschall

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