Binary addition and subtraction can be performed using simple rules. For addition, binary digits are added from right to left like decimal numbers. The sum of two 1s is 0 with a carry of 1. For subtraction, the subtrahend's binary complement is added to the minuend. If there is a carry, the result is positive, otherwise it is negative. Representing negative binary numbers can be done through sign-magnitude or complement methods. Complement is preferred for arithmetic as it works with standard addition rules.