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29 December, 12:08

Which of the following statements about credits is true? A : Credits decrease both assets and liabilities. B : Credits increase both assets and liabilities. C : Credits decrease assets and increase liabilities. D : Credits increase assets and decrease liabilities.

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  1. 29 December, 13:55
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    The correct answer is C. Credits decrease assets and increase liabilities.

    Explanation:

    A credit is a provision of money in the form of a loan, granted by a creditor (lender) to a debtor (borrower). For the creditor, the transaction gives rise to a claim on the borrower, under which he can obtain repayment of the funds and payment of remuneration (interest) according to a fixed schedule. For the borrower, whether it is a business or an individual, the credit establishes the existence of a debt (increasing liabilities) and opens the availability of a temporary financial resource.
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Home » Business » Which of the following statements about credits is true? A : Credits decrease both assets and liabilities. B : Credits increase both assets and liabilities. C : Credits decrease assets and increase liabilities.
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