What is an example of accounts payable?

One common example of accounts payable are purchases made for goods or services from other companies. Depending on the terms for repayment, the amounts are typically due immediately or within a short period of time. What are Accounts Receivable? Accounts receivable is a current asset account that keeps track of money that third parties owe to you.

What is accounts receivable?

Accounts receivable refers to payments that your customers or vendors owe you. If you have provided a good or service that hasn’t yet been paid for, that item is recorded as a current asset. Imagine you run a landscaping company and regularly charge for your lawn mowing services after you’ve completed the job.

What is accounts payable?

Accounts payable is a current liability that represents money you owe your vendors and suppliers. Whenever you receive a bill from a vendor or supplier, it should be recorded into accounts payable and paid by the specified due date.