Question

illustrate the terms debtors and creditors with an example
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Answer 1

Answer:

creditor is an individual or business that has lent funds to a business and is owed money. A debtor is an individual or business who has borrowed funds from a business and so owes it money. There is a cost in borrowing funds.

Explanation:

Another example of a debtor/creditor relationship is if you take out a loan to buy your house. Then you as the homeowner are a debtor, while the bank who holds your mortgage is the creditor. In general, if a person or entity have loaned money then they are a creditor.