In debit vs credit accounting, debits and credits are two of the most common entries found in a business journal. Debits are used to track money coming into a business, whereas credits are used to record money going out of the business. Debits increase assets, while credits decrease them. For example, when you purchase inventory with cash, you’d debit your inventory account and credit your cash account. This ensures that your asset accounts are increasing by the exact amount of cash being put in, and that your liabilities or expenses are decreasing by the same amount. Conversely, if you make a sale, you’d credit your accounts receivable and debit your sales account – the total of all your receivables would then be used to cover any business expenses. By understanding the fundamental difference between debits and credits, you can effectively juggle your finances and keep accurate records!