What is Accounts Payable

What is accounts payable, it is a obligation of a firm(debt) in a short term period, it show in balance sheet under liability section.This account represent reverse of accounts receivable. By accepting the goods or services,the buyer agrees to pay for them in the near future or less than one year.

Settlement of a present present obligation may occur in number of ways, example:

1. By payment of cash

2. Transfer of other asset

3. Provision of services

4. Replacement of that obligation with another obligation

5. Conversion of the obligation to equity

Liabilities include:

*Accounts payable
*Notes payable
*Accrued liabilities
*Unearned revenue
*Mortgage payable
*Bonds Payable
*and other debt of the enterprises