Accounts Payableare those bills that are due and payable when items are purchased on account. Normally speaking inventory that has not yet been paid for will be classified as an Account Payable.
Normal repairs, payments to vendors, inventory or anything else that is to be paid quickly is recorded under this category.
Usually when a company receives an invoice it doesn’t pay for it immediately. Some suppliers/vendors will provide for a company to pay for products or services within 30, 60, or 90 days. Until such time as the invoice is paid it is carried as an account payable.
Accounts Payable is recorded on the company’s Balance Sheet as a Current Liability. That is that the company expects to pay for this item within one year.
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