What do debit and credit mean in bookkeeping, and how do I know which side to use?

In double-entry bookkeeping, every transaction is recorded twice: one account is debited and another is credited for the same amount. A debit is the left side of an account and a credit is the right side. They do not mean "increase" or "decrease" by themselves; the effect depends on the type of account.

• Assets and expenses: debit increases, credit decreases.
• Liabilities, capital and income: credit increases, debit decreases.

For example, when you pay rent in cash, debit Rent (an expense) and credit Cash (an asset). When you sell goods on credit, debit the customer (an asset, as they owe you) and credit Sales (income). Total debits must always equal total credits, which is why a trial balance tallies.