Debits and Credits are two fundamental accounting terms used to describe how transactions affect the various accounts in a business. When money moves within an account, either in or out of it, that movement is known as a debit (a decrease) or a credit (an increase). The accounts affected by these transactions can include assets, liabilities, income, expenses, gains, and losses. If a business adds money to an account, it is said to be “crediting” it; if it removes money from an account, it is said to be “debiting” it. Debits and credits form the basis for all accounting entries and provide a systematic way of recording complex financial transactions.