Credits Always Increase Account Balances is a business concept that outlines the accounting principle of debits and credits. When accounts are debited, money is removed from the account – but if it is credited, money is added to the account. In other words, credits result in an increase in an account balance, while debits lead to a decrease. This understanding provides a basis for the recording of transactions in financial statements, allowing businesses to accurately track their finances and make informed decisions. By following this established principle of Credits Always Increase Account Balances, companies can ensure that their books are always up-to-date and correctly reflect their financial situation.