Accountants record transactions in a company's accounts.An account is used to record the changes of increase and decrease in each asset，liability，and owner's equity.Sometimes，accounts are also called ledger accounts.

The simplest form of an account is T-account.This form of account is called“T-account”because it looks like the capital letter T as shown below in Table 3-2，each T-account has three basic parts:(1)the title of the account，(2)a left side，called the debit side(the abbreviation is Dr.)，and(3)a right side，called the credit side (the abbreviation is Cr.).

Table 3-2

Each account accumulates information about both increases and decreases from various business transactions.There are two rules for recording these increases and decreases in the accounts.The first rule is that for each account all increases are recorded in one side of the account and all decreases are recorded in the other side of the account.The difference of amounts between the total increases and decreases in an account is called“Balance”.A second rule is the debit and credit rule.Whether an increase in a given item is debited or credited depends on the category of the item.By convention，asset and expense increases are recorded as debits while liability，owner's equity and revenue increases are recorded as credits.Asset and expense decreases are recorded as credits while liability，owner's equity and revenue decreases are recorded as debits.Usually the balance of each asset account has a debit balance and each liability and owner's equity has a credit balance.Table 3-3 summarize the above rules of debit and credit:

Table 3-3