Is Accounts Payable a debit or a credit or both?

Definition of an Accounts Payable Credit

Since Accounts Payable is a liability account, it should have a credit balance. The credit balance indicates the amount that 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 need to 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 the amount that is included in Accounts Payable, the company will need to debit Accounts Payable so that the credit balance is decreased.

Free Debits and Credits Cheat Sheet

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