What Does Accounts Payable (AP) Mean?
An accounting entry that represents an entity’s obligation to pay off a short-term debt to its creditors; it is found on the balance sheet under current liabilities. Accounts payable often are referred to as “payables.” AP also may refer to a business department or division that is responsible for making payments owed by the company to suppliers and other creditors. Investopedia explains Accounts Payable (AP) Accounts payable debts must be paid off within a specific period to avoid default. For example, at the corporate level, AP refers to short-term debt payments to suppliers and banks. However, APs are not limited to corporations. People also have APs owed to creditors. For example, the phone company, the gas company, and the cable company are types of creditors. Each creditor provides a service and then bills the customer after the fact. The payable is essentially a short-term IOU obligation of the customer. If people or companies do not pay their bills, they are considered to be in
