How do classifying transactions using the rules of debit and credit relate to the practice of accounting and its uses in business?
Debits and credits are a system of notation used in bookkeeping to determine how to record any financial transaction. [ In financial accounting or bookkeeping, "Dr" (Debit) means left side of a ledger account and "Cr" (Credit) is the right side of a ledger account.
To determine whether one must debit or credit a specific account we use the modern accounting equation approach which consists
of five accounting elements or rules. An alternative to this approach is to make use of the traditional three rules of accounting for: Real accounts, Personal accounts, and Nominal accounts to determine whether to debit or credit an account. ]
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