Understanding the difference between debtors and creditors
Creditors are individuals/businesses that have lent funds to another company and are therefore owed money.
By contrast, debtors are individuals/companies that have borrowed funds from a business and therefore owe money.
To whom goods/services are sold on credit are called debtors and from whom goods/services purchased on credit are called creditors.
Debtors are related with credit sales and creditors are related to credit purchase.
Q.
Debtors are shown under 'Accounts receivable' as a current asset, and creditors come under 'Accounts payable' as a current liability.