What is Trade creditors ?


Trade creditors

Trade creditors are payables created by acquisition of material, goods for resale, supplies or services in the normal operation of the business but for which no payment has been made. It is important for businesses to manage the level of creditors because if unpaid creditors can enforce bankruptcy proceedings.

Trade Creditors are reported in a balance sheet as a current liability. As for receivables, creditors have temporary debit balances. These should be isolated and reported under current assets as Creditors with debit balances.

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