.n this system transactions which added to an account were entered on one side, and those that reduced the account were entered on the other. To determine the value of the account at any point in time each side had to be totalled (often using an abacus - particularly before Arabic numerals were introduced) and the sum of the negative entries then subtracted from the sum of the positive entries. The resulting figure (the balance of the account) showing the net affect of all the positive and negative entries could then be entered on the appropriate side of the account (usually at the top of a fresh page in the account book (or ledger) and subsequent transactions recorded in the same manner. The two sides were referred to as Debit and Credit (originally in Italian) referring to the records of Debtors (who owed the business money) and Creditors (to whom the business owed money).

These terms merely designate the side of the account and might equally well be called left and right (although some teachers like to refer to Dr as 'receiving' and Cr as 'giving' sides). This two sided arithmetic relates to the accounting equation in the following way:

Owners' Claims	+	Liabilities	=	Assets
Dr Cr	+	Dr Cr	=	Dr Cr
(- +)	+	(- +)	=	(+ -)