Question

What are accounts payable and accounts receivable?

Answer 1

payable = money owed by a company to its creditors

receivable = money owed to a company by its debtors.

Answer 2

Accounts payable is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payable liabilities, which are debts created by formal legal instrument documents.

Accounts receivable are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. These are generally in the form of invoices raised by a business and delivered to the customer for payment within an agreed time frame.