Here's a breakdown:
* Debtor: The one who owes money.
* Creditor: The one who is owed money.
Think of it like this:
* You (the debtor) borrowed money from the bank (the creditor).
* You owe the bank money.
Examples of Debtors:
* A customer who has purchased goods or services on credit.
* A company that has borrowed money from a bank.
* An individual who owes money on a loan.
Important Notes:
* The term "debtor" can also refer to a person who is legally obligated to pay a debt, even if the debt is not related to a financial transaction.
* The term "debtor" is often used in the context of accounting and financial reporting, but it can also be used in everyday language.
Let me know if you'd like to know more about how debtors are recorded in accounting or have any other accounting terms you'd like explained!