3. A liability may increase and another liability may decrease by an equal amount. For example, a government has a cash flow problem and cannot pay a vendor the amount owed of $24,000. The government signs a 90-day note to the vendor with interest of 7%, thereby swapping the accounts payable for a note payable. The liability account "Accounts Payable" decreases and another liability account "Notes Payable" increases by the same amount, $24,000, as follows: Your microphone is muted