Accounting is the language of business, and understanding its terms can help you make more informed decisions about your financial future. The terms “debit” and “credit” are two key accounting terms that must be understood in order to properly record transactions in a company’s books. Debits and credits represent money that is owed or owned, often referred to as an asset or liability. When entering a debit, the amount owed is added to a company’s books while the credit reduces the amount owed. A good rule of thumb is to remember that ‘Debit the receiver, Credit the giver’. In summary, debits and credits refer to the increase and decrease of account balances within an organisation’s accounting system – whether that be cash or liabilities/assets. By understanding how these terms work, businesses can ensure their books stay accurate and up-to-date.