ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A creditor is an entity or individual lending cash to another party or extending credit, whereas a debtor is an entity or individual who owes cash to another party. For example, a debtor is an individual who has taken out a loan at a bank for a new house.

Detailed explanation-2: -Creditors are individuals, people, or other entities (i.e., organisation, government body, etc.) that are owed money because they have provided goods or services or loaned money to another entity. Generally speaking, you can expect to deal with two types of creditors: loan creditors and trade creditors.

Detailed explanation-3: -A debtor is a company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower, and if the debt is in the form of securities-such as bonds-the debtor is referred to as an issuer.

Detailed explanation-4: -A term used in accounting, ‘creditor’ refers to the party that has delivered a product, service or loan, and is owed money by one or more debtors. A debtor is the opposite of a creditor – it refers to the person or entity who owes money.

Detailed explanation-5: -A debtor is a person or other legal entity who owes money or services to another person or company. This party to whom the debt is owed is called the creditor. The money or service that the debtor owes to the creditor is called the debt or the obligation.