Accounts Payable
Accounts Payable refers to the amounts a company owes to its suppliers for goods or services received but not yet paid for. Accounts Payable is a common short-term liability in the company's operations.
Definition: Accounts payable refers to the amounts a company owes to its suppliers for goods or services purchased but not yet paid for. Accounts payable is a common short-term liability in a company's operations.
Origin: The concept of accounts payable originated in the early stages of commercial transactions when businesses conducted transactions on credit. As business activities became more complex and scaled up, accounts payable gradually became an important part of corporate financial management.
Categories and Characteristics: Accounts payable can be divided into two main categories: trade accounts payable and non-trade accounts payable. Trade accounts payable arise from the purchase of goods or services and typically have a short payment term. Non-trade accounts payable include amounts owed for other business activities (such as leasing, consulting services, etc.) and may have longer payment terms. Characteristics of accounts payable include: 1. Short-term nature: usually paid within a year; 2. Non-interest bearing: generally does not incur interest expenses; 3. Flexibility: companies can negotiate to extend payment terms.
Specific Cases: Case 1: A manufacturing company purchases raw materials worth 1 million yuan from a supplier, with an agreement to pay within 60 days. This amount is recorded as accounts payable until it is paid. Case 2: A retail company leases a warehouse with a monthly rent of 50,000 yuan, payable at the end of each month. This rent is recorded as accounts payable until it is paid.
Common Questions: 1. What is the difference between accounts payable and accounts receivable? Accounts payable are amounts a company needs to pay, while accounts receivable are amounts a company is owed. 2. Do accounts payable incur interest? Generally, no, but late payments may incur penalty interest.
