Credit and debit rules in accounting are guidelines for keeping financial records. The credits and debits must balance with each other so that the financial statements accurately reflect a company’s financial position. Generally, when entering a transaction into an account, a credit is entered on the left side and a debit is entered on the right side. Credits increase asset accounts, while debits decrease asset accounts. On the other hand, debits increase liabilities and equity accounts, while credits decrease these same accounts. Credit and debit rules help to ensure that all transactions are properly accounted for and recorded within the scope of Generally Accepted Accounting Principles (GAAP). This data can then be used to make informed decisions about a business’s financial health.