Accounts Payable Definition
Accounts payable is the money a business owes to a vendor for goods or services provided but not paid for at the time of the transaction.
Accounts Payable Extended Definition
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 and funds due for an electric bill.
Accounts payable is a short-term liability (an obligation to pay) and can help you determine if your business is profitable and can help you with your budget and future plans.
The total balance due for accounts payable is reported on a financial statement called a Balance Sheet.
Last Updated By
Andrew Freiman | Feb 22, 2023