Accounts payable is short-term debt that a company owes to its suppliers for products received before a payment is made. Accounts payable may be abbreviated to “AP” or “A/P.” Accounts payable may also refer to a business department of a company responsible for organizing payments on such accounts to suppliers.
Accounts payable entries are a type of current liability in the business’ general ledger and balance sheet. Once the company pays the account, the items are removed from the balance sheet. Accounts payable can generally be discharged without interest if paid within 30 days, but after 30 days the accounts will usually begin to accrue interest.
See, e.g. United States v. Richman, 93 F.3d 1085 (2d Cir. 1996)
See also: Account; Accounts receivable
[Last updated in June of 2022 by the Wex Definitions Team]