The basic accounting equation is

Double entry bookkeeping records every transaction twice: a debit in one account and an equal credit in another. Total debits must always equal total credits.

Assets and expenses increase with debits. Liabilities, capital, and revenue increase with credits. This self-balancing system catches errors and shows the complete picture.

Example: Buying equipment for cash – debit Equipment (asset increases), credit Cash (asset decreases). Both sides of the balance sheet are affected equally.