Accountancy/Creditors
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Creditors are people that you owe money to. So if Example Company Ltd bought a motor car on credit, the accounting entries would be as follows:
| Date | Description | Post Ref. |
Dr | Cr | |
|---|---|---|---|---|---|
| 2006 Feb |
1 | Motor vehicle (Asset) | 10,000 | ||
| Creditors (Liability) | 10,000 | ||||
Later we make a payment
| Date | Description | Post Ref. |
Dr | Cr | |
|---|---|---|---|---|---|
| 2006 Feb |
28 | Creditors (Liability) | 100 | ||
| Cash (Asset) | 100 | ||||
Whew! Those repayments are going to take some time...
As we saw when we discussed with debtors, when you receive a bank statement the bank shows you the position from the bank's point of view. When you are in credit, you have the asset and the bank is your creditor.
