Debtor – A customer who owes money to your business and therefore money will be going IN to your bank account
(Note: A debtor is also known as a debitor)
Just as debits in accounting record all the money flowing INto your bank account, a company will have an “aged debt” list. An aged debt list will be all the customers you have supplied a service, product, or loan to who now need to pay you.
The key to remembering what a debtor is, is to think money has to go INto the company’s bank account.
Debtor = INto the company’s bank account
To remember what a debtor is, think IN, and use the following mnemonic:
The debt of my organisation (debtor) meant that I'm now IN prison.