what are accounts payable and receivables

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Accounts payable are amounts owed by a company to its suppliers for goods or services purchased on credit. Accounts receivable are amounts owed to a company by its customers for goods or services provided on credit.

Accounts payable represent the money a company owes to its suppliers for goods or services received but not yet paid for.
Accounts receivable represent the money owed to a company by its customers for goods or services provided on credit.
Accounts payable are liabilities on the balance sheet, while accounts receivable are assets.
Example: A company purchases inventory on credit from a supplier, creating an accounts payable. When the company sells the inventory to a customer on credit, it creates an accounts receivable.
Example: If a company fails to pay its accounts payable on time, it may damage its relationship with suppliers. If customers fail to pay their accounts receivable on time, it may impact the company's cash flow.

what are accounts payable and receivables

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