The term ‘sundry’ is used to describe an income/expense that is relatively small or occur infrequently and therefore not assigned to specific ledger accounts. They are also known as ‘miscellaneous income/expenses’ and are classified together as a group when they are presented in financial statements. The key difference between sundry debtors and sundry creditors is that sundry debtors are customers who have made infrequent credit purchases in small amounts and owe funds to the company while sundry creditors are suppliers to whom funds should be paid by the company for making infrequent credit purchases in small amounts from them (suppliers).
CONTENTS
1. Overview and Key Difference
2. Who are Sundry Debtors
3. Who are Sundry Creditors
4. Side by Side Comparison – Sundry Debtors vs Sundry Creditors
5. Summary
Who are Sundry Debtors?
Debtors or ‘receivables’ are customers who owe funds to the company. They have purchased goods on credit and, payments are yet to be made by them. Sundry debtors, also known as ‘sundry receivables’ refer to a company’s customers who rarely make purchases on credit and the amounts they purchase are not significant. These are usually small scale customers.
Usually, the company maintains separate ledger accounts to record business transactions for each customer. This is justifiable if the customer purchases in larger volumes at frequent intervals. This may not be justifiable for smaller customers, thus it is more convenient to maintain a single ledger account named ‘sundry debtors’ to record such small scale infrequent transactions.
E.g. Company C is a manufacturer of greeting cards that also makes Christmas decorations. Due to the seasonal demand, Christmas decorations are purchased only in December. Company C has around 50 small scale customers who purchase Christmas decorations for a year and company maintains a single account for all the customers. Journal entry for sundry debtors is equal to other debtors. (Assume customer PQR purchases goods worth of $5,200)
PQR A/C DR$5,200
Sales A/C CR$5,200
Who are Sundry Creditors
Creditors or ‘payables’ are customers to which the company owes funds. The company has purchased goods on credit and payments are yet to be made to them. Sundry creditors, also known as ‘sundry payables’ refer to a company’s suppliers from whom the company rarely make purchases on credit and the amounts purchased from them are not significant. These are usually small scale suppliers.
Just as for debtors, it is not practical to maintain separate ledger accounts for each small scale infrequent supplier. Thus, these records are maintained collectively in a single account named ‘sundry creditors’. Continuing from the same example,
E.g. The above purchase will be recorded as follows in the books of PQR since Company C is a sundry creditor.
Purchases A/C DR$5,200
Company C A/C CR$5,200
What is the difference between Sundry Debtors and Sundry Creditors?
Sundry Debtors vs Sundry Creditors |
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| Sundry debtors are customers who have made infrequent credit purchases in small amounts and owe funds to the company. | Sundry creditors are suppliers who have sold goods in small quantities to the company on credit. |
| Meaning | |
| Small or insignificant volume of credit sales should be sold to a customer to account for sundry debtors. | Small or insignificant volume of credit purchases should be bought from a supplier to account for sundry creditors. |
Summary – Sundry Debtors vs Sundry Creditors
The difference between sundry debtors and sundry creditors is dependent on whether the company is the seller or the purchaser. If the company is the seller, then this results in sundry debtors and if the company is the buyer, this results in sundry creditors. It should also be noted that only infrequent small scale debtors and creditors should be recorded under sundry category; significant credit customers and suppliers should always be treated as trade debtors and trade receivables and should be accounted for separately.
References:
1. “What is the meaning of sundry and sundry debtors? | AccountingCoach.” AccountingCoach.com. N.p., n.d. Web. 16 Mar. 2017.
2. “What are sundry creditors? definition and meaning.” BusinessDictionary.com. N.p., n.d. Web. 16 Mar. 2017.
3. “What is the different between sundry creditor and Sundry debtor ?” Bayt.com. N.p., n.d. Web. 16 Mar. 2017.
Image Courtesy:
“Debt” by openDemocracy (CC BY-SA 2.0) via Flickr