• Debits and credits are the fundamental building blocks of accounting, working together to ensure that every financial transaction is recorded accurately.
• They are the tools used to balance the accounting equation and reflect the flow of money within a business.
• By understanding how these two interact, you can track the financial health of a business, organize its financial records, and ensure that everything stays balanced.
• This knowledge is crucial for maintaining accurate books and creating reliable financial reports.
• Debits and Credits need to be equal.