Question

explain the term debtors and creditors with the help of suitable example in the form of story ​

Answer 1

Answer:

What is debtors account and creditors account in accounting?

A debtor is a person from whom money is recievable. In credit sales debtor's A/c is debited and sales credited .In case of sales returns by the debtor the entry is reversed and sales returns is debited and debtor's A/c credited. It appears as an asset in balance sheet

A creditor is a person to whom a sum of money is payable. In credit purchases purchases A/c is debited and creditor's a/c is credited and in case of purchase returns reverse entry is passed

Creditor's A/c( Dr)

To purchases returns

It appears as a liability in the balance sheet.