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T-Accounts
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corporatefinanceinstitute.com
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The Corporate Finance Institute
Accounting
For asset accounts, which include cash, accounts receivable, inventory, 
PP&E, and others, the left side of the T-Account (debit side) is always 
an increase to the account. The right side (credit side) is conversely, a 
decrease to the asset account. For liabilities and equity accounts, the 
debit and credit sides of the T-Account are the same, however, the debit 
side signifies a decrease to the account and the credit side signifies an 
increase to the account.
T-Accounts for Income Statement Accounts
T-Accounts are also used for income statement accounts, which include
revenues, expenses, gains, and losses.
Once again, debits to revenue/gain decrease the account while credits 
increase the account. The contrary is true for expenses and losses. 
Putting all the accounts together, we can examine the following:

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corporatefinanceinstitute.com
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The Corporate Finance Institute
Accounting
Using T-Accounts, tracking multiple journal entries within a certain 
period of time becomes more feasible. Every journal entry is posted to 
its respective T-Account on the correct side by the correct amount. For 
example, if a company issued shares for $500,000, the journal entry 
would be composed of a Debit to Cash and a Credit to Common Shares. 
If the company issued additional shares for $400,000 the balance would 
accumulate in the respective T-Accounts.

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