Sundry Creditors and Sundry Debtors Meaning with Example

Sundry Debtors and Creditors

The word “sundry” refers to a revenue or expenditure that is either insignificant or occurs rarely and is not allocated to a particular ledger account because of its modest size or frequency of occurrence. When they are shown in financial statements, they are referred to as’miscellaneous income/expenses,’ and they are grouped together as a group when they are provided in financial statements. While there are some similarities between sundry debtors and sundry creditors, the primary distinction is that sundry debtors are customers who have made infrequent credit purchases in small amounts and owe funds to the company, whereas sundry creditors are suppliers to whom funds should be paid by the company for making infrequent credit purchases in small amounts from them (suppliers).

Sundry Debtors Meaning

Customers that owe money to the business are referred to as debtors or “receivables.” They have bought items on credit and have not yet made any payments on those purchases. In the financial world, sundry debtors, often known as’sundry receivables,’ refer to consumers who make only occasional purchases on credit and who do not spend large sums of money on their transactions. These are often consumers on a modest scale.

To record business transactions for each client, a firm often keeps separate ledger accounts for each of them. The consumer purchases in greater quantities and at more regular intervals, which justifies the higher price. Smaller clients may not be able to justify this, and it is thus more practical to keep a single ledger account titled “sundry debtors” to record such small-scale, occasional transactions on a regular basis.

Sundry Debtors Example

E.g. Company C is a greeting card company that also produces Christmas ornaments for the holiday season. Christmas decorations are only bought during the month of December because of seasonal demand. In Business C, there are about 50 small-scale clients who buy Christmas decorations on an annual basis, and the company maintains a single account for all of the customers. The journal entry for various debtors is the same as the one for other debtors. For the sake of argument, assume that client PQR purchases items valued $5,200.

• $5,200 in PQR A/C
• $5,200 in sales commissions

Sundry Creditors Meaning

A company’s cash flow is determined by the amount of money that comes in and goes out. Debtors and creditors play a critical role in determining a company’s position in its field of expertise. When doing a commercial transaction, there is a buying and selling of products or services that takes place. By the company that provides this facility, any person who is responsible for the supply of products or services to another business entity on credit will be referred to as a miscellaneous creditor.

To put it simply, Sundry Creditors are any parties, companies, or firms that we use to buy products from our business by borrowing money from them. All of these individuals fall under the category of Sundry Creditors. Sundry Creditors are those from whom we purchase products on credit in the course of our company, and those who are responsible for paying us are referred to as Sundry Creditors.

Sundry creditors are regarded liabilities to a company since they are required to pay the outstanding money for a particular transaction according to the timeframe that has been agreed upon by both parties to the transaction.

Sundry Creditors Example

Given that a company’s liabilities include a variety of creditors, they will be listed on the right side of the balance sheet. Businesses employ a distinct category to monitor these transactions, which is referred to as a miscellaneous creditor account or accounts payable in accounting parlance.

Consider the following scenario: A-One Mfg Ltd bought a certain quantity of products from Surabhi Traders for a total of Rs 12,000. This transaction was made on January 31st, 2021, and the bill must be paid before April 2nd, 2021, in order to avoid late fees. This transaction will be recorded under the ‘Sundry Creditors’ ledger account and treated as a liability by A-One Mfg Ltd since the business is required to pay its party on time in order to keep its credit score at a high level of performance.

What is the difference between Sundry Debtors and Sundry Creditors?

Basis	Sundry Debtors	Sundry Creditors
Meaning	Customers who have made sporadic credit transactions in modest quantities and who owe money to the business are referred to as “sundry debtors.”	Suppliers that have supplied products in modest amounts to the business on credit are referred to as “sundry creditors.”
Accountability	The sale of a little or minor amount of credit sales to a client should be done in order to account for a variety of debtors.	A supplier should be contacted for a little or a negligible number of credit purchases in order to account for a variety of creditors.

Also Read :

What is Contra Entry ? Types and Example of Contra Entry

Trading Account : Format for Trading Account

Accounting : Main Objectives For Accounting

Accounting Standards : Limitations of Accounting Standards

Accounting Conventions and Accounting Concepts

What is the importance of handling overdue payables in a company for any organization?

When you purchase particular products or services from your vendors or suppliers, you must ensure that you discuss and agree on a precise payment schedule for those goods or services before making your purchases. Irrespective of whether you are purchasing items on credit or not, it is critical that both parties agree on the payment schedule so that there is no bad blood between them later in the transaction.

Keeping track of your outstanding payables can help you stay on top of your expenditures on a timely basis, prevent overlooking payments that you owe to creditors, and better manage the cash flow in your company.

• Maintain a record of and keep track of due dates

An overview of the amount owed to creditors, as well as how much each creditor is owed, as well as the length of time that such payments are due, may be obtained by using this feature. Keeping track of your outstanding payables can help you stay on top of your expenditures on a timely basis, prevent overlooking payments that you owe to creditors, and better manage the cash flow in your company.

• Make use of the credit period

It is recommended that you manage your accounts by defining the credit term or due date for each party throughout the purchasing process in order to guarantee that any payments that you owe to your suppliers are recorded in a systematic manner. In the party ledger, you may set a credit term of, say, 30 days for the party to pay the bills if they are late. This assists you in avoiding disputes with your parties, keeping track of your outstanding payables in a methodical manner, and making timely payments to your parties.

• Contribute to the maintenance of a positive relationship with your provider.

Consider the following scenario:- you made a credit purchase from your supplier on March 1, 2021. Your agreed-upon due date by which your supplier expects to be paid for the products provided, which is April 1st, 2021, has been set as a deadline for payment. Given that you have always maintained a good credit score, your supplier offers you a 3 percent discount if you pay within 20 days, which is March 20th, 2021, at the latest. It is usually advantageous for a company to have this kind of connection with its many creditors, as not only will you be given discounts on supplies, but you will also retain a positive reputation with a variety of

vendors in the market.

Conclusion

The distinction between various debtors and various creditors is based on whether or not the business is the seller or the purchaser of the asset. If the business is the seller, this results in a diverse group of debtors, and if the company is the buyer, this results in a diverse group of creditors.” It should also be noted that only infrequent small-scale debtors and creditors should be recorded under the sundry category, significant credit customers and suppliers should always be treated as trade debtors and trade receivables, and should be accounted for separately from other assets and liabilities.

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