Creditors, Accounting Basics

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Creditors: this may be short or long-term lenders. Short-term creditors comprise suppliers of materials, services or goods. They are generally termed as trade creditors. Long-term creditors are those who contain lent money for a long period, generally in the form of secured loans. The major concern of the creditors is focused upon the credit worthiness of the firms and its capability to meet its financial obligations. Therefore they are concerned along with the liquidity of the firms, its productivity and financial soundness. Conversely, it can also be stated as creditors are interested mostly in information that deals with solvency, liquidity and productivity hence they could assess the financial standing of the firms.


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