Accounts Payable

Accounts payable represents money a company owes to suppliers or vendors for goods and services received.

Explanation:
It is a current liability and appears on the balance sheet. It usually comes from unpaid invoices.

Example:
If a business receives raw materials on credit, the amount owed becomes accounts payable.

Importance:
Tracking payables is critical for managing cash flow and supplier relationships.

Common Confusion:
Accounts payable is not the same as accrued expenses—they involve actual invoices.