Basic Accounting Concepts Here's a breakdown of the basic accounting concepts including debits and credits, double-entry accounting, and the accounting equation: 1. Debits and Credits: Definition: Debits and credits are fundamental concepts in accounting used to record transactions. They form the basis of the double-entry accounting system. Debit: Represents an increase in assets or expenses, or a decrease in liabilities or revenue. Debits are recorded on the left side of an accounting entry. Credit: Represents a decrease in assets or expenses, or an increase in liabilities or revenue. Credits are recorded on the right side of an accounting entry. Example: Let's say a business purchases office supplies for $500 cash. Transaction: Purchase of office supplies for $500 cash. Journal Entry: Debit: Office Supplies $500 (increasing an asset account) Credit: Cash $500 (decreasing an asset account) In this example, the debit increases the Office Supplies asset account, while t...