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:

Journal - Page 1
Date  Description Post
Ref.
Dr Cr
2006
Feb
1 Motor vehicle (Asset) 10,000
Creditors (Liability) 10,000

Later we make a payment

Journal - Page 1
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 you are a creditor of the bank - the account is a liability account for the bank, as it owes you money , if and when you can withdraw all your money. When you are in debit, you are a debtor to the bank, and the bank is your creditor, and your account with the bank is an accounts receivable or asset to the bank.