T account (accounting) – What is it, definition and concept | 2021

The T account, in accounting, is the graphical representation of an accounting record. Thus, it consists of two sides, debit and credit, or must and there, to the left and right, respectively.

The T account then allows us to record the movements in the accounting so that this is illustrated in a diagram.

We must take into account that every entry in a T account has a counterpart. That is, if a record was added to a debit account, an amount must have been added to the credit of another account of the company (we will see it in an example later).

Elements and graph of the T account in accounting

To record the registration in the T account, the account name, the account code, the debit, the credit and the balance are required.

For example, let’s imagine that we are recording the movements in the cash of a company:

101 Box

Has to To have
100 200
300 fifty
400 200
350

From the previous graph, it should be explained that 101 is the cash code, being the balance at the end of the period of 350 euros, which means that the remainder is positive for an account whose nature is debit.

In that sense, we must remember that assets and expenses have a debit nature. This, because it is understood that they are intended to generate profit for the company. Then your increases are recorded on the left side of the T account, in the debit.

Instead, liabilities, equity, and income are credit in nature. Thus, its positive variations are recorded on the right side of the T count.

Counterpart in account T

We mentioned that every entry in the T account has a counterpart. In the case shown, for example, let’s see the first record in the debit of 100 euros.

Let us imagine that this entry to the cash register originated from a sale made. Then, in the T account of sales a positive balance will be noted on the right side of the graph, as it corresponds to an increase in an account with a creditor (credit) nature.

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