The decision whether to use AC or DC coupling comes up often in circuit design. Fortunately, it is simple to sort out. You' will need to look at the kinds of signals you are dealing with. If you are processing DC, as with control voltages or low frequencies, then DC coupling is a must. A mix of AC and DC must also use DC coupling. If you can ignore or must exclude DC from your input, then AC coupling is the way to go.
AC coupling rejects DC and low-frequency signal components. For audio, this helps reject harmful DC transients, such as those you get when you plug a source into an input. On an oscilloscope, select AC coupling to ensure that the signal's centered at zero volts. Measuring signal amplitude is easier if zero is always in the same place.
Signals containing DC offsets will lose them if AC coupling is used. It cannot distinguish between DC and low-frequency AC; the designer must determine which low frequencies can be discarded without affecting the usefulness of the circuit.
DC coupling is the more versatile of the two. The low end of the input bandwidth is unrestricted. Measure or use more of the signal's components, from DC on up. For audio, low frequencies from percussion are processed more clearly.
A DC zero-volt reference point must be established somewhere in the system. This may be done a few different ways, but if it is done by manual calibration, the circuits must be periodically re-adjusted. If the circuit drifts too far off, it adds its own offset to any input signals, degrading the system's accuracy.
DC is undesirable in many audio circuits. A DC-response amplifier, for example, will amplify a DC component along with the audio. If the DC value is large, the signal may approach the internal power supply voltage, causing distortion and possibly damaging the circuit.
AC Coupling Methods
Usually, the circuit designer achieves AC coupling by placing a capacitor in series with the circuit's input, output, or both. Its value depends on how low frequencies are affected, but is typically around .1 uF.
It is also possible to use a transformer to get AC coupling. Here, the transformer can also match impedance between the circuit and external elements like microphones or speakers. It is called an isolation transformer. It must be carefully designed to minimize distortion.