Amounts owed to the firm by customers who bought goods and services on credit are called Accounts Payable. The word "accounts payable" (AP) in accounting refers to the sums owed to suppliers or vendors for products or services that were paid for with credit. Accounts payable is a balance on a company's balance sheet that represents the total amount still owing to suppliers by that organization.
The cash flow statement will show an increase or decrease in total accounts payable from the previous period. To safeguard your money and assets, avoid paying for false customers, and keep internal controls in place, it's crucial to closely monitor your AP spending.
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