Accounting is the process of recording financial transactions in a systematic way. It involves the process of recording, summarizing, and reporting financial transactions to provide relevant and reliable information for decision-making.
The Debit Credit Rules are some of the key principles governing how transactions are recorded in accounting systems. A debit is an entry on the left side of the accounting ledger that increases assets or expenses, and decreases liabilities, equity, or income. A credit is an entry on the right side of the accounting ledger which has the opposite effect: it decreases assets or expenses, and increases liabilities, equity, or income.
The difference between debits and credits can be confusing at first, but it’s important to remember these rules since they form the basis of double-entry accounting. With a bit of practice, you’ll soon get the hang of it!