Top Things to Know About Account Payable
Accounts payable refers to invoices received and must be paid. This term also refers to the department that manages the payments. Accounts payable also involves paying bills on time and according to the terms. There are a few other things to know about accounts payable that you may not know.
Things You Should Know About Accounts Payable
An accounts payable is a form of credit that allows customers to pay for a product or service after it is received.
They are not limited to corporations. They are also used at the household level.
They must be paid off within a given period of time to avoid default.
When an accounts payable is paid off, it represents a negative cash flow.
They are also know as a current liability on the balance sheet.
The accounts payable item appears on the balance sheet as a current liability since it is expected to be paid off within one year.