Definition of an Accounts Payable Credit
Since Accounts Payable is a liability account, it should have a credit balance. A credit balance indicates the amount a company or organization owes to its suppliers or vendors.
If a company purchases additional goods or services on credit (as opposed to paying with cash), the company will credit Accounts Payable so that the credit balance will increase accordingly.
Definition of an Accounts Payable Debit
If a company pays one of its suppliers an amount already in Accounts Payable, the company will debit Accounts Payable so that the account’s credit balance is decreased.
