Creditor

What is a Creditor?

A creditor is a person, business, or organization to whom money is owed.

How it Works

To start-up, a business may borrow money from a lender.

This means the lender is a creditor.

​A creditor is a person, business, or organization to whom money is owed.

A business will also obtain goods and services on credit from suppliers.

Suppliers are creditors, as well.

Their accounts show how much money the business owes to its suppliers.

Creditors accounts are liability accounts.

Liability accounts show money the business owes to others.

© R.J. Hickman 2020