Accounts payable
Accounts Payable
Accounts payable (pronunciation: /əˈkaʊnts peɪəbəl/) is a term used in accounting to refer to the company's obligation to pay off a short-term debt to its creditors or suppliers.
Etymology
The term "Accounts Payable" is derived from the practice of recording such debts in the "payable" accounts column in a company's ledger.
Definition
In the context of business, accounts payable are often depicted as current liabilities and can include services or goods received, financial obligations, or any other short-term debts a company needs to pay off within a year.
Related Terms
- Invoice: A commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer.
- Creditor: An entity (person or institution) that extends credit by giving another entity permission to borrow money intended to be repaid in the future.
- Liability: A company's legal financial debts or obligations that arise during the course of business operations.
- Accounting: The process of recording financial transactions pertaining to a business.
See Also
External links
- Medical encyclopedia article on Accounts payable
- Wikipedia's article - Accounts payable
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