Question

If business purchase on credit from a supplier, how would the supplier be referred to for the business?

Answer 1

Answer:

i business purchase on credit from a supplier than supplier will be knkwn as a creditor

Answer 2

Here the supplier will be termed as the creditor.

• Creditor is the one from whom something is borrowed or owned.
• Here the supplier is creditor because we have borrowed his assets for  which payments can be done later at the ease of purchaser.
• Payments can be made through EMIs or at terms at which agreement has been made.
• In the balance sheet of purchaser, supplier will be deemed as liability.
• Example: Person A  taking a loan of certain amount from person B. Here B will act as creditor for A.