In double-entry accounting, what best describes a debit?

In double-entry accounting, a debit represents an increase in assets and expenses or a decrease in liabilities, owner's equity, and revenue. This is crucial because it follows the fundamental accounting equation, where assets equal liabilities plus owner’s equity.

When a debit entry is made, it indicates that something has been acquired or an expense has been incurred, which increases the overall assets or expense accounts. Conversely, if liabilities or owner’s equity are decreased, it indicates a payment of debt or a reduction in the owner’s stake in the company, which is also recorded as a debit.

Understanding this principle is essential for maintaining balanced books, as every debit entry must correspond with a credit entry of equal value, ensuring the books remain balanced. This set framework of how debits function helps to provide a clear snapshot of a business's financial status.