Is the business incorporated? Since you're concerned about the three year profit rule, I'm assuming not...and if it's a small scale operation it may not really matter from an accounting perspective.

Debits vs. Credits:

Increase in Asset=Debit Increase in Liability or Equity=Credit
Decrease in Asset=Credit Decrease in Liability or Equity=Debit
Revenue=Credit Expense=Debit

But it's been 30 years since I was in accounting, so caveat emptor