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What Is Difference Between Debtors And Creditors

Creditors?

The company receives goods & services without giving cash and the company receives cash without giving goods & services then the company receives cash by Giving securities, These are all credit activities in which people involved are called creditors

Debtors?

The company gives goods & services without receiving cash and the company gives cash without receiving goods & services then the company Gives cash by receiving securities, These are all credit activities in which people involved are called debtors.

Why the term Creditors & debtors is used in accounting

If more than three names are involved in a transaction, they must record something they mention instead of the name and Instead of a person's the name he can record related documents which will be taken as his name in the personal account. For example, a company may have multiple creditors and not each name can be recorded in the final account, so one word will be specifically recorded (creditors)

This is a frequent use of the account to make the account easier to understand

The example for Creditors and debtors is given below / You can find both examples on the same page by click the Creditors & debtors options below

creditors

Debtors

example of creditors transaction

▶ Company Receives Goods & Services Without Giving Cash

▶ 04/11/20 goods were purchased from Helen ong $2000 on credit

▶ 04/16/20 Unpaid Freight Truck Charge To David Freight Truck Services P,LTD $600

▶ Company Receives cash Without Giving Goods & Services

▶ 05/22/20 The rent received in Advance from Valuable Rent Services Company Is $210

▶ 05/27/20 $500 was received in advance for the distribution of goods to Mahad jan

▶ Company Receives Cash By Giving Securities

▶ 06/04/20 MC bank loan $5000 on machinery

date	particular	amount	amount
04/11/20	purchase A/C D	2000
	to Helen Ong A/C		2000
	goods were purchased from Helen ong on credit

date	particular	amount	amount
04/16/20	Freight Truck Charge A/C D	600
	to David Freight Truck Services P,LTD A/C		600
	unpaid Freight Truck Charge

date	particular	amount	amount
05/22/20	bank A/C D	210
	to Valuable Rent Services Company A/C		210
	Rent Received In Advance

date	particular	amount	amount
05/27/20	bank A/C D	500
	to Mahad Jan A/C		500
	Mahad Jan paid advance

date	particular	amount	amount
06/04/20	bank A/C D	5000
	to M/C bank loan A/C		5000
	bank loan

ledger A/C

Helen Ong A/C
date	particular	amount	date	particular	amount
03/31/21	balance c/d	2000	04/11/20	by Purchase A/C	2000

		2000			2000
			03/31/21	balance b/d	2000

David Freight Truck Services P,LTD A/C
date	particular	amount	date	particular	amount
03/31/21	balance c/d	600	06/04/20	by Freight Truck Charge A/C	600

		600			600
			03/31/21	balance b/d	600

Valuable Rent Services Company A/C
date	particular	amount	date	particular	amount
03/31/21	balance c/d	210	06/04/20	by bank A/C	210

		210			210
			03/31/21	balance b/d	210

Mahad Jan A/C
date	particular	amount	date	particular	amount
03/31/21	balance c/d	500	06/04/20	by bank A/C	500

		500			500
			03/31/21	balance b/d	500

MC bank A/C
date	particular	amount	date	particular	amount
03/31/21	balance c/d	5000	06/04/20	by bank A/C	5000

		5000			5000
			03/31/21	balance b/d	5000

example of Debtors transaction

▶ Company Giving Goods & Services Without Receiving Cash

▶ 07/01/20 The goods were sold on credit to Alex for $1400

▶ 07/10/20 accrued rent from Walton place Services $800

▶ Company Giving cash Without Receiving Goods & Services

▶ 08/17/20 Sharman Lina was paid Rs 400 in advance. For food supply

▶ 08/23/20 Goods were bought from Bablu for $7000 and $7900 were paid..

▶ Company Giving Cash By Receives Securities.

▶ 09/29/20 The Carl borrowed $4000 from company (based on home security)

date	particular	amount	amount
07/11/20	Alex A/C D	1400
	to sales A/C		1400
	Goods Were Sold On Credit To Alex

date	particular	amount	amount
07/16/20	Walton Place Services A/C D	800
	to rent recived A/C		800
	Accrued Rent

date	particular	amount	amount
08/17/20	Sharman Lina A/C D	400
	to bank A/C		400
	Sharman Lina Was Paid In Advance

date	particular	amount	amount
08/23/20	purchase A/C D	7000
	to Bablu A/C		7000
	Goods Were Bought From Bablu

date	particular	amount	amount
08/23/20	Bablu A/C D	7900
	to bank A/C		7900
	cash paid to Bablu

date	particular	amount	amount
09/29/20	Carl A/C D	4000
	to bank A/C		4000
	Carl Borrowed (home Security)

Alex A/C
date	particular	amount	date	particular	amount
07/01/20	to sales A/C	1400	03/31/21	balance c/d	1400

		1400			1400
03/31/21	balance b/d	1400

Walton Place Services A/C
date	particular	amount	date	particular	amount
07/10/20	to accrued rent A/C	800	03/31/21	balance c/d	800

		800			800
03/31/21	balance b/d	800

Sharman Lina A/C
date	particular	amount	date	particular	amount
08/17/20	to bank A/C	400	03/31/21	balance c/d	400

		400			400
03/31/21	balance b/d	400

Bablu A/C
date	particular	amount	date	particular	amount
08/23/20	to bank A/C	7900	08/23/20	purchase A/C	7000
			03/31/21	balance c/d	900

		900			900
03/31/21	balance b/d	900

Carl A/C
date	particular	amount	date	particular	amount
09/29/20	to bank A/C	4000	03/31/21	balance c/d	4000

		4000			4000
03/31/21	balance b/d	4000