What Is Meant By Dr And Cr In Accounting System?

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Charlotte St. Aubyn Profile
The concept of ‘(Dr.-Debit) and (Cr.-Credit)’ is a vital part of the double-entry bookkeeping system which has been used for over 500 years. The meaning of these terms in the bookkeeping system has no relationship with other more common meanings of these terms in society.

The origins of these terms can be traced back to 1494 when the Italian Friar Luca-Pacioli first recorded the double-entry bookkeeping system. It was he that first described the use of the Latin terms ‘Credre’ and ‘Debere’ . In the 1500s, English translators used these Latin terms to create the terms ‘Debit and Credit’. The Latin terms obviously helped create the bookkeeping abbreviations (Dr.) and (Cr.) as well. This is because there is no ‘r’ in the English word Debit but there is one in the Latin term 'Debere'.

In Latin, the term ‘Credre’ means to entrust something and ‘Debere’ means to owe someone. For example, if Person (A) entrusts $100 to Person (B) then Person (B) owes $100 to Person (A) immediately. The example also shows that financial transactions always have two sides to them and that money received by a business must come from someone who has entrusted it. Using the terms ‘Credre’ and ‘Debere’, Friar-Luca was able to describe this principle of two sides to every financial transaction.

He called entries on the left side of the ledger's ‘T’ accounts, Debits, and entries on the right hand side of the ledger's ‘T’ account, Credits. He was so convinced of the duality of financial transactions he declared that no bookkeeper should go to sleep at night unless the total of the (Dr.-Debit) equalled the total of the (Cr.-Credit).

‘(Dr.-Debit) and (Cr.-Credit)’ in the bookkeeping system is simply a method of classification which provides a way of recording the changing values in the financial accounts of a business caused by monetary transactions. At the same time, the ‘(Dr.-Debit) and (Cr.-Credit)’ method of classification keeps the accounting equation always in balance, i.e. Assets = Liabilities + Owners Equity.
Anonymous Profile
Anonymous answered
Dr means Debit. It appears on the LEFT side of an account. It is the receiving side or the side that shows gain in value.

Cr means Credit. It appears on the RIGHT side of an account. It is the giving or losing side, showing value given.

For example, I pay my telephone bill for $100
The figure would appear on Dr side of the Telephone Account, and on the Cr side of the Cash Account.
Anonymous Profile
Anonymous answered
Dr is stand for Debit Record and Cr for Credit Record
abid ali Profile
abid ali answered
Debit record and credit record are meant of Dr and Cr in accounting system.
Anonymous Profile
Anonymous answered
Meaning of dr.
Meaning of Cr.

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