Tell me difference between accouts payable and receivables

Question

Accepted Answer

Accounts payable and receivables are both financial transactions, but they differ in terms of direction and purpose.

Accounts payable refers to the money a company owes to its suppliers or vendors for goods or services received.
Accounts receivable refers to the money owed to a company by its customers or clients for goods or services provided.
Accounts payable represents a liability for the company, while accounts receivable represents an asset.
Accounts payable is recorded as a credit entry, while accounts receivable is recorded as a debit entry.
Accounts payable is typically paid by the company, while accounts receivable is collected from customers.
Example: If a company purchases inventory from a supplier on credit, it will create an accounts payable entry. On the other hand, if a company sells goods to a customer on credit, it will create an accounts receivable entry.

Accepted Answer

Accounts payable ledger lists its short-term liabilities — obligations for items purchased from suppliers, for example, and money owed to creditors.
Accounts receivable are funds the company expects to receive from customers and partners. listed as a current asset on the balance sheet.

Top Nexdigm Associate interview questions & answers