4. Debtor and Creditor, Debit and Credit.
We must remember that John Simpson's account, mentioned in Section 3, is an account in our own books, not in his books. John Simpson is our debtor (he owes us) for the amounts on the left-hand half of his account ; he is our creditor (we owe him) for the amounts on the right-hand half of his account. He is our debtor when he receives any value from our business on account, that is, without giving any value in return at the time ; he is our creditor when he gives any value to our business on account, that is, without receiving any value in return at the time.
The terms debit and credit indicate the effect of a business transaction on the financial relation between a debtor and a creditor, and therefore the effect on the debtor and creditor sides of an account. Apply the terms debtor and creditor to accounts or to the sides of an account ; for example, " John Simpson, Dr.," " the creditor side of John Simpson's account " ; apply the terms debit and credit to the items or separate entries ; for example, " that is a debit entry," " credit John Simpson'A account with 875." Dr. is an abbreviation for debtor not for debit, and so with Cr.