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Any amount owed as the result of a purchase of goods or services on a credit basis. Although a firm making a purchase issues no written promise of payment, it enters the amount owed as a current liability in its accounts. Companies often incur this type of short-term debt in order to finance their inventories, especially in industries where inventory turnover is rapid. See alsoaccount receivable.
This entry comes from Encyclopædia Britannica Concise. For the full entry on account payable, visit Britannica.com.