Accounts Payable (AP)
Accounting glossary · Understand, connect, apply
Accounts payable are amounts owed to suppliers for goods or services acquired on credit, normally arising from ordinary operating transactions.
Example
A business buys $300 of inventory on credit, increasing Inventory and Accounts Payable by $300.
Remember the difference
A bank loan is normally recorded separately, not as a supplier trade payable.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
← Return to the accounting glossary