Accounts payable

Accounts payable can be analogized to a debt owed by Jaylen Brown to a store. Imagine that Jaylen went shopping at a store and bought some items, but instead of paying for them right away, he agreed to pay for them later. The store has extended him credit, and the amount he owes the store is now considered accounts payable. Just like Jaylen has an obligation to pay the store, a business has an obligation to pay its suppliers for goods or services received on credit.

The amounts owed to suppliers are recorded in an accounts payable ledger and are considered a liability on the balance sheet until they are paid. In short, accounts payable represent the debts a company owes to its suppliers for goods and services purchased on credit. Like Jaylen's debt to the store, accounts payable are a short-term liability that must be paid within a certain period of time.