A credit to a liability accountA) indicates an increase in the amount owed to creditors.B) indicates a decrease in the amount owed to creditors.C) is an error.D) must be accompanied by a debit to an asset account.

Question

A credit to a liability accountA)  indicates an increase in the amount owed to creditors.B)  indicates a decrease in the amount owed to creditors.C)  is an error.D)  must be accompanied by a debit to an asset account.

Chris McNatt · Accepted Answer

Final Answer : A, Explanation :  A credit to a liability account indicates an increase in the amount owed to creditors. In double-entry accounting, credits increase liability accounts.

A credit to a liability account

A) indicates an increase in the amount owed to creditors.
B) indicates a decrease in the amount owed to creditors.
C) is an error.
D) must be accompanied by a debit to an asset account.

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