Which account is affected when credit increases and debit decreases?

When credit increases and debit decreases, the account that is predominantly affected is Accounts Payable. This is because Accounts Payable is a liability account that increases on the credit side when you incur new liabilities or obligations to pay, such as receiving goods or services on credit. The nature of these transactions means that an additional credit reflects an increase in what the business owes, while any corresponding debits would typically represent a decrease in liabilities, which may occur when payments are made.

In the context of the other options: Undeposited Funds typically involve timing for cash deposits rather than being purely a liability or expense; Sales Income generally involves revenues, which would increase with a credit but would not be appropriately described by the original statement; and Accounts Receivable represents amounts owed to the business, which would typically increase with debit entries when credit sales are made, contrasting the statement's focus on liabilities. Thus, Accounts Payable is the account that correctly aligns with the condition of increasing credits and decreasing debits.