alleryStart learning →A computer worth 500 is bought on credit from ABC Computers. How is ABC's account treated?
ADebited, as an expense
BCredited, as a liability
CCredited, as an income
DDebited, as an asset
Answer & Solution
Correct answer: B. Credited, as a liability
The supplier has not been paid, so a payable liability is created and credited, balancing the debit to equipment.
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