It is the amount, which a company owes to suppliers, and is shown as a liability in the balance sheet. Accounts Payable are different from notes payable liabilities, which are debts created due to formal legal documents. It is recorded in sub-ledger of the account payable when an invoice is sent for the payment. It is a form of credit offered by suppliers to their customers to pay for services or products they may already have been received. Service providers offer several payment terms for invoices including, cash discount for making payments within the specified time.
