Debit versus Credit (Accounting Acronyms)

Accounting Acronyms

In accounting we often use abbreviations or acronyms. For example, GAAP (Generally Accepted Accounting Principles), AICPA (American Institute of Certified Public Accountants), etc. In addition, we oftentimes see abbreviations for debit and credit. We use dr for debit and cr for credit.

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Debits

Debits are used to increase assets and decrease liabilities and owners' equity. In accounting, we use "dr" to represent debits. This doesn't really make sense to most first time accounting students as there is no "r" in the word debit. The abbreviation for debit, dr, is taken from the latin and italian root of debit that is over 500 years old; it stands for debit record.

Credits

Credits are used to increase liabilities and owners' equity and decrease assets. In accounting, we use "cr" to represent credits.

Normal Account Balances

The "normal balance" of an account is determined by how the account increases. Therefore, if an account increases with debits, that account carries a normal debit balance (i.e. cash increases with debits and has a normal debit balance).

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