In accounting terms, what is referred to as the left side of the account?

In accounting, the left side of an account is referred to as the debit side. Debits are entries that increase asset and expense accounts, while they decrease liability, equity, and revenue accounts. This relationship is fundamental to the double-entry bookkeeping system, where every transaction impacts at least two accounts in a way that maintains the accounting equation: Assets = Liabilities + Equity.

Understanding that the left side (debit) signifies an increase in assets is crucial for accountants. For example, if a business acquires equipment, that transaction will be recorded as a debit to the equipment (an asset) account. Knowing how debits function allows for accurate record-keeping, ensuring that all financial activities are correctly tracked and reported.