Explanation of "Account Payable"
Definition:
The term "account payable" refers to a type of financial record that shows how much money a business owes to its suppliers or vendors for goods and services it has purchased on credit. In simpler terms, if a company buys things (like materials or services) but hasn't paid for them yet, the amount it owes is recorded as "accounts payable."
Usage Instructions:
"Account payable" is commonly used in a business context, especially in accounting and finance.
It is a noun and is usually used in plural form: "accounts payable."
When discussing finances, you might say, "The company's accounts payable increased this month."
Example:
Simple Example: "The company has an account payable of $5,000, which means it needs to pay this amount for goods it received but hasn't paid for yet."
In a Sentence: "The finance team is reviewing the accounts payable to ensure all bills are paid on time."
Advanced Usage:
In more advanced discussions, especially in financial analysis, you might encounter phrases like "managing accounts payable" or "optimizing accounts payable processes," which refer to strategies businesses use to handle their debts efficiently.
Word Variants:
Payable (adjective): This can describe something that is due for payment. For example, "The invoice is payable by the end of the month."
Account (noun): A record of financial transactions.
Different Meanings:
"Account" on its own can refer to a financial record or a narrative of events. For example, "She gave a detailed account of her trip."
"Payable" can also refer to any amount that is owed, not just in business contexts.
Synonyms:
Liabilities: This is a broader term that includes all debts a company owes, including accounts payable.
Debts: General term for any amount of money owed.
Invoices: Specific bills that detail the amount owed for goods or services.
Idioms and Phrasal Verbs:
"In the red": This idiom means being in debt or having negative account balances, which can relate to accounts payable.
"Pay up": This phrasal verb means to pay money owed. For example, "You need to pay up your accounts payable by the due date."
Conclusion:
Understanding "account payable" is essential for anyone involved in business or finance, as it helps track the money a company needs to pay for its expenses.