The official business definition of Accounts Payable is that it is a liability account that is used to record amounts owed to suppliers and other creditors for goods and services purchased on credit. It is a current liability account, meaning that the amounts owed must be paid within a short period of time, usually within 30 days. The amounts owed are usually recorded as a debit in the Accounts Payable account, while the payments made to suppliers and creditors are recorded as a credit. This is because the company is decreasing its liability by making the payment. In summary, Accounts Payable is a current liability account and is recorded as a debit when the amount is owed and a credit when the payment is made.
