Distinguish between debtors and creditors, profit and gain

Explanation

1. Debtors refer to a person who bears the liability to pay the sum of the amount after some time to an individual or a firm. They tend to show a debit balance on books of accounts of a firm or business payments are to be received from them.

2. Creditors can be a firm and an individual who does not bear any liability but receives money from the firm or an individual whose balance is on the credit side of the firm.


Profit is the excess of revenues over expenses during an accounting period. It is the result of business transactions which are of regular nature whereas gain arises from events or transactions which are incidental to business such as sale of a fixed asset or winning a lottery prize.