Accounting and Bookkeeping

Accounts Payable

Accounts Payable is a liability account found on the Balance Sheet or Statement of Financial Position that represents money owed to another party. Accounts payable are expenses that arise in the normal course of operations and due in the short-term, such as a bill from a supplier, utility vendor, or subcontractor for services rendered. Accounts payable do NOT include payroll obligations, which should be recorded separately.

The following journal entry examples illustrate how accounts payable is created and relieved.