Why Debits and Credits

A Franciscan monk by the name of Luca Pacioli developed the debit and credit system and double-entry accounting. The article explains that the words "debit" comes for the Latin word "debitum", meaning what is due, and "credit" comes from the word "creditum", meaning a loan. This is why when there is an increase in the account assets it is a debit because something is due for the increase. An increase in liablilities, however, means someone loaned you something and thus you owe them money back. There are three different theories as to why the abbreviations are DR and CR. The first is that the Latin past participles of the word are "debere" and "credere". The next theory is that they abbreviations stand for "debit record" and "credit record". The last theory is that they stand for "debtor" and "creditor".