Definition: is a certain amount of money that a firm owes either to a supplier, vendor or other organization because it has acquired certain goods or services from them. A/p can also be considered as an unpaid bill and are almost always treated as a liability that needs to be paid so that a company can avoid serious financial consequences. The presence of accounts payable on a firm’s balance sheet is a sign that it is either suffering from financial problems or low-quality accounting services.
In a Sentence:
The latest purchase of printers for our office was registered as accounts payable since the management didn’t possess sufficient funds to pay the suppliers immediately.
The sum displayed in our credit balance under accounts payable has scared off a potential business partner.
The company’s management has taken several crucial steps to settle the issue of accounts payable by using only the funds available to them immediately.
Synonyms and related words: accounts payable to sales ratio, open book management, bankruptcy, accounts receivable
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