T-Account
A visual bookkeeping tool shaped like the letter T that displays debit entries on the left and credit entries on the right.
What is T-Account?
A T-account is a simplified visual representation of a ledger account used in double-entry bookkeeping. Shaped like the letter T, it lists debit entries on the left side and credit entries on the right. Every transaction recorded under double-entry bookkeeping affects at least two T-accounts simultaneously, ensuring the accounting equation remains balanced. T-accounts are widely used in accounting education and by accountants to analyze complex transactions before formally recording them in the general ledger.
Example
A company receives $10,000 cash from a customer. In the Cash T-account, $10,000 is recorded on the left (debit). In the Accounts Receivable T-account, $10,000 is recorded on the right (credit), reducing the amount owed.