When payment is made to a creditor, what account is credited?

When payment is made to a creditor, the correct account to be credited is Accounts Payable. This is because Accounts Payable represents the amounts owed to creditors for purchases made on credit. When a payment is issued, the liability decreases, which is accomplished by crediting the Accounts Payable account.

The cash account is actually debited, as cash is being paid out to settle the liability. This reflects a reduction in cash on hand. On the other hand, purchases and sales accounts relate to the buying and selling of goods and services, and these are not directly involved in the payment process to creditors.