Accounts Payable Definition
Money owed from a business to a vendor for goods or services provided but not paid for at the time of the transaction. The total balance due for accounts payable is reported on a financial statement called a Balance Sheet.
Using the accrual method of accounting, accounts payable refers to funds owed by a business to a vendor for the purchase or use of goods or services. Accounts payable can include money owed to a vendor for the purchase of supplies as well as funds due for an electric bill. It is considered a short term liability (an obligation to pay) and recorded on a financial statement called a Balance Sheet.