What does a debit entry do in accounting?

In accounting, a debit entry serves to increase assets or expenses. This principle is rooted in the double-entry bookkeeping system, where each transaction affects at least two accounts. When a debit is made, it typically signifies that assets are being acquired or that expenses are incurred.

For instance, if a company purchases office supplies, it would debit an asset account like "Office Supplies" to reflect the increase in resources available to the business. Similarly, if the company incurs an expense, such as a utility bill, debiting the corresponding expense account increases the total expenses recognized on the income statement, which in turn reflects a decrease in net income.

The distinction of debits affecting assets and expenses is foundational to accounting practices, illustrating how financial transactions impact the company's financial statements. Understanding this concept is critical for accurate financial reporting and analysis.