Introduction to Debtors

Debtors are amounts which are owed to you by your customers, they are sometimes referred to as Accounts Receivable.

When you allow your customer credit and invoice them for a product or service and receive payment at a later date 30 days 60 days etc, then while they owe you the money they are classified as a debtor.

Debtors are recorded in the balance sheet of the business under the heading Current Assets, that means they are convertible into cash within a year.

How do you record Debtors?

Debtors are normally first recorded in the Sales Ledger which contains a personal account for each customer. In this way a listing of the sales ledger accounts will give you a listing of outstanding debts or debtors.

If for example, sales are made on credit to Customer A for £200 and Customer B for £400 the first entry would be to the sales day book to record the sales.

Sales Day Book – to record the sales
Sales Day Book Page 1
Date Customer Invoice Page Amount
8th May 2013 Customer A Invoice 123 Page 4 200
9th May 2013 Customer B Invoice 456 Page 7 400
Total Sales 600

The next entry would be to the Sales Ledger to record the Debtors to the personal accounts of each customer.

Sales Ledger – to record the Debtors
Customer A Page 4
Date Account Page Debit Credit
8th May 2013 Sales SDB 1 200
Customer B Page 7
9th May 2013 Sales SDB 1 400
Total Debtors 600

Finally the double entry posting would be the total from the sales day book and the sales ledger.

Double entry posting to the debtors control account
Account Debit Credit
Debtors Control Account 600
Sales 600
Total 600 600
Debtors November 6th, 2016Team

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