What effect does a credit have on a liability account? A credit increases the balance in a liability account. A credit could either increase or decrease the balance in a liability account, depending on the account. A credit decreases the balance in a liability account. A credit has no effect on the balance in a liability account. Company XYZ purchases equipment from Vendor A on account. Which of the following accounts should be debited in this transaction? Equipment Equipment Expense Accounts Payable Cash