Account Payable Definition
Accounts payable is the amount of money a company owes to suppliers and creditors for goods and services purchased on credit. Accounts payable are recorded on the balance sheet as a current liability. A company’s accounts payable will fluctuate over time, depending on how much it has borrowed from suppliers.
A company can choose to pay its creditors in full, or it can make partial payments. If a company only makes partial payments, it is said to have outstanding accounts payable. Outstanding accounts payable will increase the amount of interest a company owes its creditors.
