T- Account

T- Account

T Account

T account is the visual representation of the accounting entries made in journal in an account which is T shaped and it have the left side and the right side for recording of the financial transactions of the business where the entry on the left side denotes debiting the account and the entry on the right side denotes crediting the account

Explanation- T Account

In the double entry system of accounting every financial business transaction is recorded in atleast two accounts. The debit amount in every transaction is always equal to the credit. Debit & credit denote whether the transaction is reported at the left side or the right side of the T account of a particular account item. The account is known as T account because it has 2 columns for recording the increase and decrease in the particular item where the increase is recorded in one side and the decrease on the other and since the individual account of every item (assets, liabilities, capital, expense, and revenue) takes the form of T, it is known as T account. This account helps in determining the individual balances of every item at the given time or at the end of every accounting year.

The format of T account is as shown below:

xxx A/c

DateParticularsDebit ($)DateParticularsCredit ($)

To understand the above diagram we need to consider below points:

  1. The increase in the assets and expenses is debited while the decrease is credited.
  2. The increase in the Liabilities and Income is credited while the increase in debited. For example, if the T account of the cash is prepared then all the transactions that lead to increase in cash is reported on the left side of the account which reflects debit in the cash account while all the transactions that may lead to decrease in cash is reported on the right side which reflects crediting of cash account. To elaborate it further we can take the example of a business that made following transaction in cash. We will assume that the opening balance of cash is nil.

01-04-18Capital introduced in cash         10,000
15-04-18Expenses paid in cash               200
18-08-18Cash sales               400
20-08-18Table purchased               100

So, Cash account recording the above transactions will be as follows:

Cash A/c

DateParticularsDebit ($)DateParticularsCredit ($)
01-04Capital introduced        2,00015-04Expenses paid           200
18-08Cash sales           40020-08Table purchased           100
   30-04Balance c/d        2,100
          2,400          2,400

Therefore, the balance at the end of the month of April is $2,100.


Therefore, T account is the visual representation of all the account items of the business which start with the balance of each account at the start of the financial year/accounting year (opening balance) and then it includes all the transactions that affects the balance of that account and finally total of all debits and credits are made so that the difference between the debit total and the credit total can be calculated that thereby gives us the balance of that account at the end of financial year/accounting period (closing balance).

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