Welcome back to our blog today we are going to talk about debtors and creditors in the balance sheet with examples so if you are an accountant then you should know what is debtors and creditors and how to show them in the balance sheet.

Debtors and Creditors In Balance Sheet
Debtors and Creditors In Balance Sheet

 What are debtors and creditors?

First, let me tell you about what are debtors and creditors? 

* Debtors (Accounts Receivable):

  • Debtors refer to the individuals or entities who owe money to your business for goods or services provided on credit.

* Creditors (Accounts Payable):

  • Creditors are the individuals or entities to whom your business owes money for goods or services received on credit.

Debtors And Creditors In The Balance Sheet

Now let's start to solve the example:

- Current Assets
- Cash and cash equivalentsImmediate access to funds for expenses and payments20,000
- Accounts receivable (debtors)Money owed by customers for purchased goods or services40,000
- Trade debtors (customers)35,000
- Other debtors (loans to employees, advances)5,000
- InventoryFinished goods and raw materials ready for sale18,000
- Prepaid expensesExpenses paid in advance, like insurance or rent2,000
- Current LiabilitiesDue within 1 year
- Accounts payable (creditors)Money owed to suppliers for purchased goods or services32,000
- Trade creditors (suppliers)28,000
- Other creditors (short-term loans)4,000
- Accrued expensesExpenses incurred but not yet paid, like salaries or utilities5,000
- Short-term loanLoan due within 1 year from a bank or lender10,000
Shareholder EquityOwner's investment and retained earnings43,000


  • Typically shown under "Accounts Receivable" in the current assets section.


  • Shown under "Accounts Payable" in the current liabilities section.


Here in this post, we add debtors and creditors in the balance sheet example so if you are learning to account then you should learn debtors and creditors.