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Definition of ACCOUNT PAYABLE
: the balance due to a creditor on a current account
First Known Use of ACCOUNT PAYABLE
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.