Liability Accounts Are Increased by Debits

question 25

True/False

Liability accounts are increased by debits.

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Definitions:

Commercial Paper

Very short-term debt issued by major companies.

Revolving Credit Agreement

A formal, binding agreement with a bank as to the maximum amount a firm can borrow during a period of time. Interest is paid on the amount borrowed and a commitment fee is paid on the unused balance.

Promissory Note

A lending agreement in which the borrower promises to pay principal and interest in accordance with specific terms.

Commercial Banks

Banks that provide a wide range of services to businesses and consumers including loans, checking accounts, and savings options.