A payment of $400 to a creditor, on account, will cause:
A)cash to be debited for $400.
B)accounts receivable to be credited for $400.
C)accounts payable to be debited for $400.
D)accounts payable to be credited for $400.

Question

Quizplus · Accepted Answer

When a payment is made to a creditor on account, it reduces the amount owed to the creditor. This is recorded by debiting (decreasing) accounts payable, which is a liability account, by the amount of the payment.

A Payment of $400 to a Creditor, on Account, Will