Bitcoin’s current ownership state is represented by unspent transaction outputs, not account balances. Each UTXO has a value and a locking script defining the conditions under which it may be spent.
A wallet balance is a convenient sum of UTXOs the wallet can authorize. Spending resembles using whole coins: selected outputs are consumed and any remainder returns as a newly created change output.
UTXO selection affects fees, privacy and future spending cost. Consolidating many small outputs can be efficient when fee rates are low, but combining them can reveal common ownership.
For the clearest picture, read this entry together with Transaction, Full Node, Private Key, Wallet, Mempool. The reverse links also lead from Full Node, Transaction, Private Key, Wallet.
Discrete transaction output
Spent atomically, not partially
Tracked by validating nodes
Selection affects cost and privacy