MANAGEMENT

Detailed explanation-1: -An accounts receivable record identifies the companies from which credit purchases were made and the amount purchased, paid, and owed.

Detailed explanation-2: -Accounts payable (AP) represents the amount that a company owes to its creditors and suppliers (also referred to as a current liability account). Accounts payable is recorded on the balance sheet under current liabilities.

Detailed explanation-3: -Accounts payable is a liability since it is money owed to creditors and is listed under current liabilities on the balance sheet. Current liabilities are short-term liabilities of a company, typically less than 90 days. Accounts payable are not to be confused with accounts receivable.

Detailed explanation-4: -Definition: When a company purchases goods on credit which needs to be paid back in a short period of time, it is known as Accounts Payable. It is treated as a liability and comes under the head ‘current liabilities’. Accounts Payable is a short-term debt payment which needs to be paid to avoid default.