Accounts Payable
What Does Accounts Payable Mean?
Accounts payable is a term referring to the amount of money a business owes to its suppliers.
How it Works
A business will buy goods and services on credit from suppliers.
This means the supplier will allow the business time to pay for the goods and services.
A supplier is also known as a creditor.
They are called this because they extend credit over time.
A business may have many suppliers.
The total amount of money owed to all suppliers is known as accounts payable.
To see how to account for accounts payable, see ‘Recording Supplier Transactions‘
© R.J. Hickman 2020