2. Double-entry accounting Aa Aa Based on the accounting equation, the double-entry accounting system requires that transactions be recorded in at least two accounts. A T account is one of the many ways to format these accounts. A T account consists of an account name and the debit and credit side. Debits and credits may indicate either the increase or decrease of an account balance, depending on the account in question. Similarly, the normal balance for an account could either be a debit or a credit, depending on which account it is. Double-entry accounting requires that total debits equal total credits for every transaction. This ensures that the accounting equation always balances Account Name Debit Side Credit Side Throughout the process of completing transactions, a company applies many debits and credits to each type of account. In the following table, indicate whether each account type listed normally has a Debit balance or Credit balance Debit Credit O Owner's Drawing Account Owner's Capital Account Liabilities Expenses