Debits and Credits

From reading this article I learned that a debit is an increase in the value of assets in an account and credits are a decrease in liabilities or owner's equity. The Latin word "debitum" meaning "what is due" became to be known in Engilsh as "debit." When assets are increased, something must be due for the increase (money)-therefore, this is a debit. The Latin word "creditum" meaning "something entrusted to another, or a loan" is known today as "credit." An increase in liabilities is a credit because it represents the amount of money someone else has entrusted in another. There are several interepretations for the abbreviations for debit "DR" and credit "CR" but it is not clear what exactly they stand for. Lastly in the article it is mentioned that debits and credits (invented by Luca Pacioli) have become the "basis of modern day accounting."

Disclaimer

I am a high school student conmpleting this blog as part of an assignment. Enjoy reading but understand I am still in the learning process and therefore the information below should not be relied upon.