Double Entry Treatment of Liabilities: - JSS1 Business studies Lesson Note

Increase in Liabilities: When a liability is incurred, it is recorded as a credit entry in the respective liability account. For example, when borrowing money from a bank, the loan payable account is credited.

Decrease in Liabilities: When a liability is paid off or reduced, it is recorded as a debit entry in the respective liability account. For example, when making a payment towards a loan, the loan payable account is debited.