Question

when paying a creditor describe which accounts would be involved and which account(s) would increase and/or decrease:

Answer 1

Answer- When paying a creditor Accounts payable and Cash accounts would be involved. Journal entry will be

Accounts payable a/c dr.

To, Cash

Debit – What came into the business
The liability to the supplier (accounts payable) is reduced by the amount paid.

Credit – What went out of the business
Cash went out of the business with the payment of a liability to settle the Supplier Account

In this transaction both the assets and liabilities are reduced by the same amount.