Debits and credits are used to record financial transactions in accounting. In the case of a balance sheet, debits increase assets or expenses and credits decrease liabilities, equity or income. Debiting an account means that something is being added to it – whether it’s cash or a payment. Crediting an account on the other hand, means that something is being taken away from it – such as the settlement of a debt. Together, these two concepts form the basis of double-entry bookkeeping; where any transaction requires corresponding equals items entered into different accounts.