Source of "r" in dr?

Both are shorthand for two Latin terms:

Credere and Debere. The abbreviation is really supposed to be "Dr." and "Cr." but it's easier/faster to write "DR" and "CR" so the origin has become even further obscured.

-Holly

Not that this is what you asked (it's been answered), and you probably already were told this in class, but debit in accounting is just another way to say "left" and credit "right." The "left" and "right" here simply refer to the two sides (the left and right) of a T-account. T-accounts are good tool to imagine to help you learn accounting. They're a tool you will use to keep track of changes in account balances. A good way to think about ASSETS=LIABILITIES+OWNERS' EQUITY using T-accounts is

T-Account (e.g., Cash, Building, Accounts Rec., or even assets in total) ______________________________________________ ASSETS: Left/Debit/Increase|Right/Credit/Decrease | | EQUAL------------------------------------------------

T-Account (e.g., A/P, Deferred/Unearned Revenue/Total Liab.) ________________________________________ LIABILITIES: Left/Debit/*DECREASE*|Right/Credit/*INCREASE* | | PLUS T-Account (e.g., Common Stock, Retained Earnings, APIC) ___________________________________________ OWNERS' EQUITY: Left/Debit/*DECREASE*|Right/Credit/*INCREASE* | | Financial accounting is mostly about how events in a business change this equation. This sort of presentation helps in understanding *why* exactly debits need to equal credits. Basically, take any of the three parts of the equation. I'll choose assets. If any of the asset T-accounts are "debited" that means they are increased by the debit process. This would involve putting a number on the LEFT side of some asset T-account, such as cash, or possibly for assets in total, if that's what you were concerned with keeping track of. Now, as you know from pre-algebra, anything you do to one side of an equation either must be undone to keep the equation true OR must be done to the other side of the equation.

So, we have two options here: One, we can undo what we did to the one side of the equation we increased (that is now out of balance by that much) by DECREASING that same side (think A+3-3=L+OE), which would involve crediting it by the same amount. Why would crediting the same side make the equation equal again? Because crediting the asset side is the same thing, by definition, as decreasing it. And, when using T-accounts, it also means placing it on the right side of the T-account. So, for example, if you have a T-account called Cash and you have a T-account called Building, and you pay $100,000 for a building, you Credit (Decrease) the Cash T-Account while Debiting the Building T-account. Note ALSO though that if you were just wanting to keep track of total assets you could simply debit the total asset T-account and then credit the Total asset T-account. Or, you could simply add up all of the asset T-accounts by name (e.g., cash, Accounts Receivable) at the end of the period to get total assets.

Now, the other way to get the equation into balance would be to do the same thing to the other side of the equation that you did to the asset side. That is, in this case, you would increase it, since you increased the asset side (think A+3=L+OE+3).

Of course, I'm leaving out one _major_ thing, and that of course is that you of course don't just "pick" a way to make the equation balance, but on the contrary the situation will dictate to you what to debit and what to credit. It might call that you only do one or the other or even a mix of the two options.

But I think it's helpful to know that what you're doing is essentially trying to keep an equation to stay equal. So, an example for the second choice might be receiving inventory on account. You can't do this the same way as we did the first example. This situation dictates balancing the equation in a different manner. This would involve an increase (debit) to the T-account inventory and a credit (which is an increase on the other side of the equation) to the accounts payable T-account. This keeps the equation balanced, and with this you can see sort of why debits really by definition will equal credits.

I know you didn't ask for me to teach the class here, but I sometimes wish my introductory instructors had taught things more clearly initially and throughout my undergraduate career. This stuff sinks in over time anyway, but some accounting instructors jump into trying to teach rules way too soon without trying to teach more of the logic behind what they're teaching.

Hi x,

Wow, you gave a really great explanation! Fortunately, my textbook also did a good job of explaining the concept. Both are good sources of information. This is all new information to me, and I'm doing what I can to learn as much as possible.

I appreciate the effort that you put into your well-written response. YOU should write a textbook. :)

SBM

Ahh....

My book says, "the words debit and credit abbreviate the Latin terms debitum and creditum" (Accounting by Horngren, Harrison, Bamber page

47). As you can see, this threw me, since there is no "r" in the word "debitum". I double checked Webster's online dictionary and it said that the etymology of debit is"Latin debitum".

After reading your post, I thought that I had misread my text. I triple checked things, and after seeing that my book specifically used the word "debitum", I went to Webster again. Webster lists debere in the etymology of the word "debt".

I really appreciate your help, Holly!

Thanks! SBM

No problem! I haven't studied Latin, but I know enough of a cousin language (Italian) to take a stab at reconciling those differences. I'm thinking debitum is a noun and debere is a verb, both, obviously, with the same basic root. So... close enough for a cigar (or something :)

-Holly

Bravo!!

As a 47 yr old man who took his very first accounting class last fall I applaud you for that explanation!

I always did very well in math in high school..... but I admit that I struggled with Acct 101.

Matter of fact I'm gonna re-take 101 again this fall at another college b4 going to Acct 102.