Debit and credit basics are the fundamental accounting principles used to keep track of financial information. At its most basic level, a debit is a type of transaction that increases an asset or expense on your balance sheet while a credit decreases it. For example, if you buy a new laptop, the cost of the laptop would be debited from your Assets account and credited against your Cash account. Similarly, when selling stock, the proceeds are credited to your cash account and debited from your investments. Understanding debit and credit basics is essential for any business owner, as it helps them better track their finances and make informed decisions.