A debtor is a person who:

**The reasoning** Think of the word "debtor" — it comes from *debt*. A debt is money you owe someone. So a **debtor** is someone who owes *you* money. It's that simple. In accounting terms: when someone buys goods from your business on credit (promise to pay later), they become your debtor. You've given them something, and they're *in debt* to you. They owe you. **Why the wrong options tempt you** **B) Lends us money** — This is backwards! Someone who lends *us* money is called a **creditor** (we owe them, so they have credit with us). The "lend/owe" confusion catches many students. **C) Owns shares** — That's a shareholder, totally different concept. **D) Owns assets** — Anyone can own assets; this has nothing to do with owing money. **Quick takeaway** **Debtor = Debt = They owe YOU.** If you owe them, they're your *creditor*. Just remember: the debtor is in debt *to you*, so you're waiting to collect your money from them.