Accounts Payable (AP) is a type of accounting that records the amount of money that a company
owes to its creditors or suppliers for goods or services purchased on credit.
It is a liability account that represents the amount owed by a business to its creditors and suppliers.
AP transactions are recorded in the general ledger as debit entries,
and they are reported on the company's balance sheet as a liability.
This information is also used to prepare financial statements,
such as the balance sheet that shows the company's financial position.
The process of managing accounts payable typically includes activities
such as verifying the accuracy of invoices, processing payments,
reconciling supplier statements, and resolving any disputes with suppliers.
In summary, Accounts Payable is a critical component of a company's financial management,
as it helps ensure that the company pays its debts in a timely and organized manner,
and helps maintain good relationships with suppliers.