An account payable is an obligation to a supplier or vendor for goods or services that were provided in advance of payment.

To illustrate an account payable let's assume that Joe's Plumbing Service provides XCorp with repair services on August 29 and agrees to bill XCorp. On August 31 XCorp receives an invoice from Joe's for $900. The invoice states that the $900 is due within 30 days. After reviewing and approving the invoice, XCorp enters Joe's invoice into its accounting records with a credit to Accounts Payable and debit to Repairs and Maintenance Expense.

Until the invoice from Joe's Plumbing Service is paid, Joe's invoice serves as the supporting document for XCorp's accounts payable and also as a supporting document for Joe's accounts receivable.

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