account payable

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account payable

A business manager reviews the account payable ledger on her computer.

Definition

Noun 1. A debt owed by a business for goods or services purchased on credit: An "account payable" is a specific type of liability recorded in a company's accounting books. It represents a short-term debt or an obligation to pay a supplier for items bought or services received where payment has not yet been made. These are considered current liabilities because they are typically due within a short period, such as 30, 60, or 90 days.

Usage Examples
  • Noun:
    • The company's balance sheet shows a significant increase in accounts payable this quarter.
    • Before closing the books, the accountant must review all accounts payable to ensure they are accurate.
    • An invoice from an office supply store creates an account payable for the business.
Advanced Usage
  • "Accounts Payable" (AP) as a department/function: In business operations, "Accounts Payable" (often capitalized) refers to the department or the financial process responsible for paying the company's suppliers and bills.
    • She works in the Accounts Payable department, processing vendor invoices.
  • "Aging of accounts payable": A report that categorizes unpaid supplier invoices by their due date (e.g., current, 30 days past due, 60 days past due), used to manage cash flow.
    • The aging of accounts payable report indicated several overdue invoices.
Variants and Related Words
  • Payable (Adjective): Describing an amount that is due to be paid.
    • The invoice is payable within 30 days of receipt.
  • Trade Payable: A more specific term for an account payable arising from the purchase of physical goods (inventory) from a supplier.
  • Account Receivable (Noun): The opposite concept; it is money owed a business by its customers for goods or services sold on credit.
Synonyms
  • Liability (in an accounting context)
  • Debt (specifically a short-term trade debt)
  • Bill
  • Invoice Payable
Related Phrases
  • To settle an account payable: To pay off the debt.
    • We settled the account payable with our main supplier last week.
  • Outstanding accounts payable: Refers to payables that have not yet been paid.
    • The manager reviewed the list of outstanding accounts payable.
account payable

A business manager reviews the account payable ledger on her computer.

Noun
  1. a liability account showing how much is owed for goods and services purchased on credit
    • the problem was to match receivables and payables in the same currency

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