What is accounts payable? Explain with examples.

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Accepted Answer

Accounts payable is the amount of money a company owes to its vendors or suppliers for goods or services received.

Accounts payable is a liability account that shows the amount a company owes to its vendors or suppliers.
It is recorded in the balance sheet under current liabilities.
Examples of accounts payable include bills for raw materials, utilities, rent, and other expenses.
Accounts payable is usually paid within a certain period of time, known as the payment terms.
If a company fails to pay its accounts payable on time, it may damage its credit rating and relationship with its vendors or suppliers.

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