What are Trade Debtors?
Trade debtors are the amounts that are owed to a company. On other words it is the money clients from sales that have not been collected yet. These outstanding accounts are referred to as trade debtors and better known as trade receivables.
Other interesting facts:
- Debtors can very in all shapes and sizes for example a small business client with revenue below R1m and a larger corporate client with revenue exceeding R30m - Any amounts owed to the business will be classified as a trade debtor
- The nature of debtors can differ they can be temporary or long standing debtors.
FAQ
Is a Trade debtor an asset or liability?
A trade debtor is an asset because the company is owed this money from a debtor/purchaser to whom they sold.
What is the difference between a trade creditor and a trade debtor?
A trade debtor is an asset, and a trade creditor is a liability.
Is a trade debtor a credit or debit in the trial balance?
A debtor is an asset and will therefore reflect as a debit on the trial balance.
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