Debits are used to record business transactions that involve an exchange of value. In double-entry bookkeeping, a debit is an entry for the income, expense or asset account when a transaction occurs. A debit increases the balance in these accounts, while a credit decreases it. The total debits and credits must be equal at the end of each accounting period in order to maintain accurate and up-to-date records. By using debits and credits correctly, businesses can monitor their financial health, track their cash flow and identify areas where they can reduce costs.