Accounting is the practice of recording financial transactions, and debit and credit rules are the fundamental principles underlying this practice. In essence, a debit represents an increase in assets or a decrease in liabilities while a credit denotes a decrease in assets or an increase in liabilities. This key concept is at the heart of understanding how accounting works: debits always equal credits across any given period. By knowing, applying and manipulating these rules, businesses can ensure that their finances remain balanced and accurate for the long run.