What term is defined by the CLIC mnemonic?

What term is defined by the CLIC mnemonic?

• A. Creditors
• B. Liability
• C. Income
• D. Capital

Answer: (A)

CLIC helps you remember four kinds of accounts related to what a business owes and earns: Creditors, Liabilities, Income, and Capital. Creditors are the specific liabilities representing amounts owed to suppliers. They sit on the balance sheet as liabilities, and in bookkeeping you increase them when you buy on credit and decrease them when you pay what you owe. This makes Creditors the term defined by the mnemonic in this context, since it’s the concrete creditor item included in the CLIC group. The other terms—Liabilities (the broader category), Income (revenue), and Capital (owner’s equity)—are related concepts but are not the particular item represented by the mnemonic’s listing in this question.

CLIC helps you remember four kinds of accounts related to what a business owes and earns: Creditors, Liabilities, Income, and Capital. Creditors are the specific liabilities representing amounts owed to suppliers. They sit on the balance sheet as liabilities, and in bookkeeping you increase them when you buy on credit and decrease them when you pay what you owe. This makes Creditors the term defined by the mnemonic in this context, since it’s the concrete creditor item included in the CLIC group. The other terms—Liabilities (the broader category), Income (revenue), and Capital (owner’s equity)—are related concepts but are not the particular item represented by the mnemonic’s listing in this question.