Distinguish between debtors and creditors; profit and gain
(i) Difference between Debtors and Creditors:
Debtors are persons and/or other entities who owe to an enterprise an amount for buying goods and services on credit. They are shown in the Balance Sheet as sundry debtors on the assets side.
Creditors are persons and/or other entities who have to be paid by an enterprise an amount for providing goods and services on credit. They are shown in the Balance Sheet as sundry creditors on the liabilities side.
Distinguish between profit and gain
(ii) Difference between Profit and Gain:
Profit is the excess of revenues of a period over its related expenses during an accounting year. It increases the investment of the owners and arises from regular business operations.
Gain is a profit that arises from events or transactions which are incidental to business, such as sale of fixed assets, winning a court case, or appreciation in the value of an asset.
Explanation
The context clearly defines all four terms. Debtors (Section 1.5.19) owe money to the business for credit purchases and are assets; Creditors (Section 1.5.20) are owed money by the business for credit purchases and are liabilities. Profit (Section 1.5.10) is revenue minus expenses from regular operations. Gain (Section 1.5.11) is incidental profit from non-routine events like selling fixed assets or winning court cases.