For example, a secured loan (i.e., one backed by collateral) isn’t a debenture. A debenture is issued by the business receiving the loan as a promise to repay a borrowed sum. A debenture is a long-term debt and appears in the liabilities section of a company’s balance sheet. Meanwhile, shares are the company’s obligation to [...]

For instance, if a company purchases supplies on credit, it increases its Accounts Payable—a liability account—by crediting it. When the company later pays off this payable, it reduces the liability by debiting Accounts Payable. For example, when a company receives cash from a sale, it debits the Cash account because cash—an asset—has increased. On the [...]