Accounts Payable
What Does Accounts Payable Mean?
Accounts payable is a term referring to the amount of money a business owes to its suppliers.
![ac1](https://seeaccountingnow.online/wp-content/uploads/2020/04/ac1.jpg)
How it Works
A business will buy goods and services on credit from suppliers.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/ac2.jpg)
This means the supplier will allow the business time to pay for the goods and services.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/ac3.jpg)
A supplier is also known as a creditor.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/ac4.jpg)
They are called this because they extend credit over time.
![ac5](https://seeaccountingnow.online/wp-content/uploads/2021/06/ac5.jpg)
A business may have many suppliers.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/ac6.jpg)
The total amount of money owed to all suppliers is known as accounts payable.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/ac7.jpg)
To see how to account for accounts payable, see ‘Recording Supplier Transactions‘
© R.J. Hickman 2020