Account payable
Account payable (alternatively known as A/P or, simply, payable; hereinafter, the Account) is any unpaid balance such as unpaid supplier invoices and bills that the legal entity owes to its vendors. In other words, any Account represents some amounts owed by a legal entity to its creditors. That debt can emerge, for instance, from the purchase of goods or services on account.
Any bill that is due to be paid now or will be due in some future is called a payable. Special financial accounts such as Accounts Payable include the complete list of the Accounts. Once a bill is paid it is removed (or debited) from Accounts Payable. Accounts Payable are a part of the Liabilities.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Accounts payable. Amounts owed to creditors that result from the purchase of goods or services on account -- a liability.
Related concepts
- Bookkeeping. Recording, filing, and retrieving of financial data, as well as producing those financial reports that are required by laws.
