Question

multiple choice question
which of the following statements is the correct definition of a creditor?

a creditor is an individual or organization which purchases merchandise from a business on account.
a creditor is an individual or organization which is trying to borrow money from a business.
a creditor is an individual or organization that owes money to a business.
a creditor is an individual or organization that has a right to receive payments from a business.

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Explanation:

A creditor is a party that is owed money by a business. The incorrect options describe other roles: the first is a credit customer, the second is a potential borrower, and the third is a debtor (a party that owes money to the business).

Answer:

D. A creditor is an individual or organization that has a right to receive payments from a business.