What term is used to describe someone who owes a financial obligation to another party?

What term is used to describe someone who owes a financial obligation to another party?

• A. Debtor
• B. Creditor
• C. Investor
• D. Borrower

Answer: (A)

The term that describes someone who owes a financial obligation to another party is "debtor." A debtor is an individual or entity that is obligated to repay money or financial obligations to another party, known as the creditor. This relationship arises when the debtor borrows funds or receives credit, promising to repay that amount under agreed-upon terms. In contrast, a creditor is the party that lends the money or extends credit, thus being the entity to whom the debt is owed. An investor is someone who puts money into a financial venture with the expectation of earning a return, but they do not inherently have an obligation to repay someone else. A borrower is a broader term that can overlap with debtor but is often used in specific contexts of taking a loan or credit. However, "debtor" is the most precise term to describe the role of someone who owes a financial obligation.

The term that describes someone who owes a financial obligation to another party is "debtor." A debtor is an individual or entity that is obligated to repay money or financial obligations to another party, known as the creditor. This relationship arises when the debtor borrows funds or receives credit, promising to repay that amount under agreed-upon terms.

In contrast, a creditor is the party that lends the money or extends credit, thus being the entity to whom the debt is owed. An investor is someone who puts money into a financial venture with the expectation of earning a return, but they do not inherently have an obligation to repay someone else. A borrower is a broader term that can overlap with debtor but is often used in specific contexts of taking a loan or credit. However, "debtor" is the most precise term to describe the role of someone who owes a financial obligation.