Sunday, 27 January 2019

8. Debtor:

8. Debtor:



     A debtor is a person who owes money to the business. He owes money to the business because he has received some benefit from the business. A debtor constitutes an asset for the business.
     A debtor may be (a) a trade debtor, (b) a loan debtor, (c) a debtor for an asset sold on credit or (d) a debtor for the service rendered on credit.

     (a) Trade Debtor:
     A Trade debtor is a person who owes money to the business for the goods supplied to him on credit.

     (b) Loan Debtor:
     A loan debtor is a person who owes money to the business for the loan advanced to him.

     (c) Debtor for Asset Sold:
     A debtor for asset sold is a debtor who owes money to the business for any asset, say, furniture or machinery, sold to him on credit.

     (d) Debtor for Service Rendered:
     A debtor for service rendered is a debtor who owes money to the business for the service rendered to him on credit, e.g., commission due from a person.

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