What is Accounts Payable?

Accounts payable are amounts which are owed by you to your suppliers for the purchase of trade goods or services, they are sometimes referred to as trade payable or trade creditors.

Accounts payable are recorded in the balance sheet of the business under the heading of current liabilities, that means they are payable within a year.

What is Accounts Payable? June 5th, 2018Team
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Buy Goods on Credit from a Supplier

If as a business, you buy goods on credit from a supplier (creditor) then the supplier will supply the goods and business will incur a liability to the supplier for that amount, but no cash will change hands at that stage. Suppose for example, the business buys goods on credit for the amount of £4,000.

Buy Goods on Credit from a Supplier November 6th, 2016Team
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Creditors Basics in Accounting

Creditors are amounts which are owed by you to your suppliers, they are sometimes referred to as Accounts Payable or Trade Creditors.

If your supplier allows you credit and invoices you for a product or service and you make payment at a later date 30 days 60 days etc, then while you owe the supplier the money they are classified as a creditor of your business.

Creditors Basics in Accounting June 5th, 2018Team
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