Meaning of Sundry debtor and creditors
What are a sundry debtor and sundry creditor? When a businessman starts a business, the businessman has to purchase many types of goods and services in the business. When the business of the businessman runs smoothly, then there are many types of transactions that take place in cash as well as in loans. In simple language, if the goods are sold by the businessman to a customer on credit, then the customer is called a sundry debtor for the businessman, and if the purchases are made on credit, then the person from whom the item is purchased is called a sundry creditor.
Understanding debtor & creditors
Friends, if you still have some questions in your mind, then after reading this you will get the answers to your question.
When we sell to or provide our services to, someone in the goods as if we are producing something. And when we sell that produced goods to any person or firm, then that person or firm will be called Sundry Debtor for us. And when we will do its accounting and create its account then we will put it in the sundry Debtor groups. But friends, we will not include those in this group to whom we have given loans.
sundry creditor: – This includes all those people who ask us for money, or from whom we have taken a loan from the goods and are yet to pay.
when we do production in business, we need a lot of raw materials and other goods. And when we purchase goods in such quantity and if their money is left, then we give late then we will call these people sundry creditor, and while doing their accounting they have to be put in sundry creditor group.
In this group, we keep all those people who ask us for money, from whom we have either purchased any goods or have taken any services.
But friends from whom we have taken loans, we will not include them in this group.
sundry debtors and sundry creditor in Balance Sheet
Friends, when we finalize the Balance Sheet on 31st March, many times it happens that the balance of the people we had put in sundry creditor groups is coming towards credit, or debited those whom we had put in sundry creditor group. Comes to the side. So, friends, you can do this in such a situation that the side the account is coming from, put it in the same group. Suppose if the balance of the person with the sundry creditor is coming towards a debit, then you put it in the sundry debtor group. You will benefit from this that your balance sheet will be ready soon, and you will not have any problem viewing the details of the group.
What is the importance of Debtor and Creditor
Debtors and creditors are very important in any business. It can also be said that no business is possible without them. When a business is started by any person, then if the person does not have capital, then in this situation the person starts the business by borrowing money from someone and taking risks. The capital borrowed by the person is invested so that the person can get more profit in return for that capital. It is common to have a creditor in this situation. Many times big companies also take money from the market at low-interest rates to run their business and earn profits.
A creditor is in a situation when a person has taken a loan or any goods have been purchased on credit. Whereas the debtor is the assets of the company. If companies have more money, then their capital is also run by companies on interest in the market. Apart from this, it is natural to become a debtor even if any goods in the loan have been sold by the company or person. The sundry debtor and creditor have a lot of influence on the balance sheet. If a company has fewer creditors and more debtors, then the company is in profit, and if the creditors are more than the debtors, then the company has more debt.
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