Taccount

A T-account is a simplified visual representation of a general ledger account used in double-entry bookkeeping. It resembles the letter T, with the account title at the top, a vertical line dividing debits on the left from credits on the right, and an optional running balance at the bottom. Debits are posted on the left side and credits on the right. T-accounts are used to illustrate how transactions affect accounts and to show the double-entry principle, where every debit entry has a corresponding credit entry.

In practice, journal entries are posted to T-accounts to reflect the effects of business events. For example, when cash increases by 5,000, Cash is debited 5,000 on its left side, and when service revenue is earned, Revenue is credited 5,000 on its right side. After posting, the totals on each side are compared; if the left side exceeds the right, the account has a debit balance; if the right side exceeds the left, it has a credit balance. Asset and expense accounts typically carry debit balances, while liability, equity, and revenue accounts typically carry credit balances.

Limitations: T-accounts are a teaching and visualization tool and are not a substitute for the ledger. In modern systems, postings appear in the general ledger with dates, references, and running balances; T-accounts may be used informally to explain or review transactions.

History and usage: The format is traditional in accounting education and is widely used in textbooks and introductory courses to teach the basics of double-entry bookkeeping. See also general ledger and double-entry bookkeeping.