. A person who owes money to the firm is
A: A creditor
B: A debtor
C: An investor
D: A lender
- A creditor is a person or other business firm from whom the company has purchased goods or services on credit.
In such a case, the company is liable to pay the amount to the person or business firm. The Company owes money to the creditor.
- A debtor is a person or the other firm who bought goods or services from the company on credit and is liable to pay the amount in the future.
The person who owes money to the firm is called a debtor.
- An investor is a person who invests his money in the firm with the motive of earning profit.
An investor invests his money, bears risks associated with the firm, and shares profit & losses also.
- A lender is a person who extends credit or lends money to the firm which the motive of earnings in form of interest. He lends his money for a specific period at a fixed rate of interest.
Hence, the correct answer is Option B: A debtor.