account payable

account payable

noun

plural accounts payable

Definition of ACCOUNT PAYABLE

:  the balance due to a creditor on a current account

First Known Use of ACCOUNT PAYABLE

1812

account payable

noun    (Concise Encyclopedia)

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 also account receivable.