Expenses are business costs incurred by a company to operate, generate revenue, and/or provide a product or service. They are one of the most important elements of a company’s financial operations. A debit is an accounting entry made on the left side of the balance sheet that increases expenses and reduces cash. A credit is an accounting entry made on the right side of the balance sheet that decreases expenses and increases cash. When businesses track expenses using debits and credits, they are following the double-entry rule of bookkeeping. This method ensures accuracy and traceability when tracking transactions, making it the accepted standard for accounting practices today.