Debtor example sentences

This ratio also helps in working out the average collection period, ratio calculated by dividing the days/ months in a year by debtors turnover ratio.Current assets include cash in hand, bank balance, debtors, bills receivable, stock, prepaid expenses, accrued income, and short-term investments (marketable securities).In explaining double entry system, Pacioli wrote that 'All entries… have to be double entries, that is if you make one creditor, you must make some debtor'.Debtors are persons and/or other entities who owe to an enterprise an amount for buying goods and services on credit.It needs to be noted that debtors should be taken before making any provision for doubtful debts.For example, a trader who sells on credit basis knows that some of the debtors of the current period would default and would not pay or would pay only partially.The total amount standing against such persons and/or entities on the closing date, is shown in the balance sheet as sundry debtors on the asset side.Current Assets are assets held on a short-term basis such as debtors(accounts receivable), bills receivable (notes receivable), stock (inventory), temporary marketable securities, cash and bank balances.The figureures of various accounts such as cash in hand, cash at bank, bills receivable, sundry debtors, fixed assets, etc.In case of incomplete records, details of some items like creditors, cash purchases, debtors, cash sales, other cash payments and such receipts are easily available, but there are a number of items the details of which will have to be ascertained in an indirect manner by using the logic of double entry.For other items we have explained as to how available information can be used to ascertain their missing figureures with the help of total debtors and total creditors, total bills receivable and total bills payable accounts and summary of cash.To illustrate, valuing closing stock at cost or market value whichever is lower; creating provision for doubtful debts, discount on debtors; writing of intangible assets like goodwill, patents, etc.In fact, as a matter of business experience, some percentage of such debtors are not likely to pay, hence treated as doubtful debts.Higher turnover means speedy collection from debtors.After selling the goods on credit basis the debtors may be given certain deduction in amount due in case if they pay the amount within the stipulated period or earlier.