T-account
Financial Accounting glossary · Financial Accounting
Definition
Visual representation of an account showing debits on the left and credits on the right.
T-account in plain English
A T-account is just a quick sketch accountants doodle to track one thing — say, 'Cash' — shaped like the letter T, with increases on one side and decreases on the other. The left side is called debits and the right side is called credits (those are only direction labels, not 'good' and 'bad'). It's the accounting version of tracking your bank balance on scratch paper: money in on one side, money out on the other, and the difference is what's left. It exists because seeing the two sides lined up makes it obvious whether an account is growing or shrinking.
Practice T-account
Which of the following describes the immediate impact on the accounting equation?
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