Accounts payable is our short-term obligation to pay our suppliers for products and services purchased on credit.
We record these credit transactions of purchase in Accounts Payable Ledger or Purchase Book.
For example, when we purchase goods on credit from supplier A. We agree to pay that amount at a mutually agreed time, that particular amount is our Accounts Payable.
Supplier A becomes our creditor. Payables are our liabilities and reported under the head of current liabilities in our Balance Sheet.
The Payables are just a short-term debt payments we require to pay to avoid the default.
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