Financial accounting Management accounting Auditing Tax accounting Major areas[show]AuditingCost accountingForensic accountingFinancial accountingF und accountingGovernmental accountingManagement accountingTax accounting Key concepts[show]Accounting periodAccrualConstant purchasing power accountingEc onomic entityFair valueGoing concernHistorical costMatching principleMateriality Revenue recognitionUnit of account Selected accounts[show]AssetsCashCost of goods soldDepreciation and Amortization EquityExpensesGoodwillLiabilitiesProfitRevenue Accounting standards[show]ConvergenceGenerally accepted accounting principlesGen erally accepted auditing standardsInternational Financial Reporting StandardsInt ernational Standards on AuditingManagement Accounting Principles Financial statements[show]Annual reportBalance sheetCash flow statementIncome st atementManagement discussionNotes to the financial statements Bookkeeping[show]Bank reconciliationDebits and creditsDouble-entry systemFIFO an d LIFOJournalLedger / General ledgerT accountsTrial balance Auditing[show]Audit firmsAuditor's reportFinancial auditInternal audit People[show]Accounting organizationsAccountantsInvestorsManagementShareholders Development[show]Accounting researchHistory of accountingPositive accountingSarb anesOxley Act Related topics[show]BusinessesCompaniesEconomicsFinance Business Portal v t e "Debit" redirects here. For the Dalmatian grape variety, see Debit (grape). For the Italian grape variety, see Bombino bianco. Not to be confused with Debt. In double entry bookkeeping, debits and credits (abbreviated Dr and Cr, respecti vely) are entries made in account ledgers to record changes in value resulting f rom business transactions. Generally speaking, the source account for the transa ction is credited (an entry is made on the right side of the account's ledger) a nd the destination account is debited (an entry is made on the left side). Indiv idual transactions may require multiple debit and credit entries to record, and total debits must equal total credits for each transaction.[1][2] The difference between the total debits and total credits in a single account is the account's balance. If debits exceed credits, the account has a debit balanc e; if credits exceed debits, the account has a credit balance.[3] For the compan y as a whole, the totals of debit balances and credit balances must be equal as shown in the trial balance report, otherwise an error has occurred. Accountants use the trial balance to prepare financial statements (such as the b alance sheet and income statement) which communicate information about the compa ny's financial activities in a generally accepted standardized format.