Working With Debits and Credits
The sometimes confusing world of debits and credits is called a double-entry or dual-entry accounting system. Basically, every transaction, whether it involves using a company’s resources or buying a new resource, has two sides. For example, when you buy new inventory for $8,000, you have to use cash or credit to pay for that inventory.
Debits and credits are opposites. Debits are always an increase to an asset or expense account and a decrease to a liabilities and income account. They are always on the left side of an accounting entry. Credits are always an increase to a liabilities or income account, ...