What is the difference between trade debtors and the sales ledger?

• A. Trade debtors are the balances of all customers; the sales ledger lists each individual debtor’s balance.
• B. Trade debtors are individual customers who owe money; the sales ledger is the control ledger listing each debtor’s balance.
• C. Trade debtors are customers who have paid; the sales ledger tracks invoices.
• D. Trade debtors are suppliers; the sales ledger is the cash book.

Answer: (C)

Trade debtors represent the total amount a business is owed by all its customers at a given date. The sales ledger is the detailed subsidiary ledger that holds a separate account for each customer, showing how much they owe, the invoices issued, and the payments received. The sum of all individual customer balances in the sales ledger equals the overall trade debtors balance, which is tracked in the trade debtors control account in the general ledger. In short, trade debtors = the total accounts receivable, while the sales ledger = the per-customer records that make up that total.