What action should be taken for an increase in mortgage payable?

When a mortgage payable increases, it signifies that the company has incurred additional debt or taken on more obligations that need to be repaid in the future. In accounting, liabilities represent the financial obligations of a business. To reflect this increase in liabilities, the correct action is to credit the liabilities account.

Crediting a liability account adds to its balance, thus accurately representing the heightened amount owed. For instance, if a business secures an additional loan that increases its mortgage payable, the accounting system must be updated to reflect this financial change.

The other choices involve adjustments to assets or incorrect treatment of liabilities, which would not properly account for the increase in the mortgage payable. Therefore, the action of crediting liabilities is essential for accurate financial reporting and ensuring that the balance sheet reflects the true financial position of the entity.