Expense Debit Credit is an accounting term used to describe a transaction in which one account receivable (debit) is decreased while another liability or expense account (credit) is increased. This can be used to record any type of transaction, such as paying taxes or purchasing office supplies. The debited account is typically the asset that is used to purchase an item and the credited account is the liability or expense that is incurred as a result of the purchase. By understanding how this system works, you will have greater insight into the financial workings of your business.