What is Accounts Payable?

[niyati]

I keep hearing about accounts payable in accounting, but I’m not exactly sure what it involves. Can someone explain what accounts payable means?

 

[Jarwish]

Accounts payable (AP) is an amount of money the business owes its suppliers or vendors in terms of goods and services that are received but not paid for yet. It is posted as a liability in the balance sheet of the company and is a short-term debt of the company that is to be repaid within a certain period, normally under a credit term. Effective AP management is important in ensuring proper relationships with suppliers and good cash flow.

 

[smith]

Accounts Payable (AP) is the money a business owes to its suppliers or vendors for goods and services received but not yet paid for. It is recorded as a liability on the company’s balance sheet. Managing accounts payable helps ensure timely payments and maintains good relationships with suppliers.