Account payable
Encyclopedia of Business Terms and Methods, ISBN 978-1-929500-10-9. Copyright © 2012 by Marty J.Schmidt. Revised 12 January 2012.
The Meaning of Account Payable
An account payable is a liability representing an amount owed to a creditor usually arising from purchase of merchandise, materials, or supplies.
Accounts payable (the sum of all account payable items) is a liabilities account, or the sum of a number of liabilities accounts, reported on the balance sheet as a current liability, along with other short-term obligations. On the balance sheet at the end of the accounting period, the sum of all accounts (still) payable, might appear under Current Liabilities as follows:
Grande Corporation Figures in 1,000s Assets Liabilities Owners Equity |
(For the complete detailed balance sheet example, see the encyclopedia entry for balance sheet).
The summary accounts payable line here, of course, may represent the sum of several or many payable accounts at period end.
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