The correct answer is Vendor's suspense account Sometimes the purchasing firm does not takeover the vendor's debtors and creditors, but instead agrees to collect book debts and pay creditors out of debtor collections. The company charges a commission based on a percentage of both the amount collected from debtors and the amount given to creditors for this purpose. Since the purchasing business performs this function on behalf of the vendors, any profit or loss (in the form of discounts and bad debts) should be paid by them. Important Points For closing of Debtors Account, the following entries are passed:Entries in the Books of Purchasing Company:ParticularsDebitCreditVendor's Debtors A/c Dr. xxxx To Vendor's Suspense A/c xxxx Entries in the Books of Vendor Company:ParticularsDebitCreditPurchasing Company Suspense A/c Dr. xxxx To Debtor's A/c xxxx