- A section of the accounting department that is responsible for processing vendor invoices and other bills for goods and services that a company received on credit.
- The title of the current liability account containing the amounts owed for vendor invoices and other bills that have been approved but not yet paid. The balance in Accounts Payable is expected to be a credit balance.
- Amounts owed which did not involve a promissory note. If a promissory note is involved, the account Notes Payable will be used instead of Accounts Payable.
If the company owes for goods and services and the amounts are not yet recorded in Accounts Payable, they must be entered with an adjusting entry at the end of the accounting period. The credit portion of the adjusting entry is likely to be recorded in a separate current liability account such as Accrued Expenses and Liabilities.
Accounts payable may also be referred to as trade payables.
To learn more about the various aspects of accounts payable, see our Explanation, Quiz, Q&A, and more.