explain why creditors are a liability/personal account and debtors are an asset/personal account?
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Creditors are the liability of the business entity. Liability for such creditors reduces with the payment made to them. ... It is the obligation of a business until it supplies the goods. In case of failure to deliver the goods, we shall return the amount.
Debtors are shown as assets in the balance sheet under the current assets section while creditors are shown as liabilities in the balance sheet under the current liabilities section. Debtors are an account receivable while creditors are an account payable.
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