A debtor is an individual or entity that owes money. An individual (person or firm) who receives a profit without giving cash or money’s worth instantly, but legally responsible to reimburse in future or in due course of time is a debtor. Debtors are regularly also called borrowers or obligors in contracts. The debtors are shown as an asset in the balance sheet. For example, if you borrow $10,000 from a bank, you are the debtor and the bank is the creditor.
A debtor is a consumer who has purchased a good or service and therefore owes the supplier payment in return. Therefore, on a primary level, approximately all companies and people will be debtors at one time or another. For accounting purposes, customers/suppliers are referred to as debtors/creditors.